- Current phase in markets is of steady accumulation, managing risk, and preparing portfolios for the future rally
According to July 2025 Alpha Strategist Report by Motilal Oswal Private Wealth (MOPW), India can be considered a high-scoring pitch with stable macro conditions and all the right drivers in place for a long innings.
Talking from the cricket analogy perspective, the report notes that further, much like initial PowerPlay overs, the Mar-Apr’25 correction was the time to be aggressive as entry levels provided a margin of safety. The last 3 months thus was more about quick gains.
The report notes that post rebound, the current consolidation phase of the markets is like the “Middle overs” in 50 overs matches. It is where you build the innings, not slog.
You rotate strike, protect your wicket, and quietly set up for a strong finish. In markets, it is the phase of steady accumulation, managing risk, and preparing portfolios for the future rally. In the middle overs, discipline and strategy win, not blind aggression. Hence one should focus on building and avoid taking aggressive risks.
Click here to see detailed report
Click here to see previous reports
Global markets’ performance has been quite divergent so far this year. However, one thing remained the same over the last 3 months – the first half was dominated by volatility amid geopolitical uncertainty while the latter half of the month paved the way for a stable upward move.
Most of the major indices exhibited resilience during the near-war conflict between Iran and Israel and even during the brief closure of the strategically important Strait of Hormuz. Crude prices, after a sharp rise, resumed a downward move, reflecting the reduced dependence of the world on Crude and on the Middle East to meet that demand.
In the U.S., the Big Beautiful Bill is set to widen the fiscal gap by $3.3 Tn over the next ten years, and the current-account deficit is also set to widen to 6%+ (last seen during the year 2006), which underscores twin-deficit risks amid a softening dollar.
While trade deals have started to get finalized, for major trade partners of the US, including India, the EU and the likes, negotiations are taking longer than expected. Hence, uncertainty over this event may spill over to one more quarter.
Closer home, India’s services-export engine, PLI pay-offs, FTA with other countries and benign crude are expected to reduce the impact of tariff imposition, even as headline GDP growth remains in the range of 6.2-6.7%, supported by consumption and govt spending.
While overall macro looks stable, high-frequency indicators are providing a mixed outlook from a near-term perspective. GST growth was single-digit in Jun’25, IIP grew by 1.2% in May’25 (down from 2.7% in Apr’25) while manufacturing and services PMI printed at multi-month highs.
FII Flows have been positive but modest over the last 3 months, while net flows in Equity MFs have also witnessed some slowdown. Monthly FII flows data for the last 63 months reveal that FII outflows lead to negative monthly returns ~90% of the time, even if DIIs remain buyers.
Valuations have also risen sharply across the market-cap and sectors. However, we stay constructive given pockets of high-growth opportunities which are visible and also the fact that a soft and stable dollar is always positive from the FII flows perspective.
Equity Portfolio Strategy
The equity portfolio allocation stance remains neutral, with a distribution of 65% to large caps and 35% to mid- and small-cap stocks. For investors currently under-allocated to equities, they could consider lump-sum investments in the hybrid category, and a staggered investment approach through SIPs or STPs would be more prudent for pure equity-oriented categories.
Fixed Income View & Portfolio Strategy
Proactive measures by RBI on policy easing and liquidity have resulted into steepening of the yield curve. Hence in our view one may be overweight on accrual strategies across the credit spectrum by allocating to Private Credit Strategies, InvITs & Select NCDs Additionally, investments into Arbitrage funds, income plus arbitrage FoF and Conservative equity savings may be considered as tax efficient fixed income alternative solutions depending on the investment horizon.
Due to limited room for further capital gains, softening of the yields should be used an opportunity to gradually reduce the exposure from duration strategies in the 10 – 15-year segment.
Gold & Silver Outlook
- MOPW continues to maintain a neutral stance on gold, while Silver can be considered a tactical play, though not as a substitute for gold.
