The Indian stock market — particularly the benchmark indices Nifty 50 and Sensex — has historically performed well during the month of July. Over the past decade, these indices have often shown a strong upward trend. With this historical data in mind, and considering both domestic and global economic indicators, it’s important for investors to gauge the potential direction of the market in July 2025.
This article analyses the July performance of the Nifty 50 and Sensex over the last 10 years, highlights sector-specific trends, and offers an outlook for July 2025.
Historical Performance of Nifty 50 and Sensex in July
Between 2015 and 2024, the Nifty 50 has posted positive returns in July in 9 out of 10 years. The only exception was 2019, when it declined by 5.69%. On average, the Nifty 50 and Sensex returned 3.57% and 3.43%, respectively, making July historically a favourable month for investors.
With positive returns in 9 out of the past 10 years, July has proven to be a promising month — potentially indicating another strong showing in 2025.
Sectoral Performance in July Over the Past Decade
Sector-wise, July has seen varied performances across industries. While some sectors have delivered impressive gains, others have shown mixed results. Below is a count of how many times each sector delivered over 5% returns in the month of July during the last 10 years:
Note: Based on data from 2015 to 2024.
Among these, PSU Banks have emerged as a consistent top performer in July over the past decade.
Further analysis shows that sectors like Energy, PSU Banks, Commodities, and PSE tend to do well during this month. In terms of exceptional single-month returns (>10%), PSU Banks (4 times), Metals (3 times), and sectors like IT, Energy, Pharma, and Realty (2 times each) stood out.
FII and DII Trends in July
Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs) play a critical role in driving market sentiment. Here’s a look at their activity in July over the last five years:
FIIs recorded their highest July investment of Rs 33,994 crore in 2023, while DIIs invested Rs 23,486 crore in 2024.
The strong inflows from both FIIs and DIIs in 2024 suggest positive sentiment and momentum going into July 2025. Monitoring their activity will remain key for investors.
Key Triggers for the Market in July 2025
With a historically strong track record and favourable indicators, July 2025 could be another positive month for Indian equities. Here are the key factors to watch:
Historical Strength: Nifty 50 and Sensex have delivered gains in 9 out of the past 10 July. In 2022, both indices saw exceptional gains — 8.73% for Nifty and 8.58% for Sensex. The only negative return came in 2019.
Sectoral Opportunities: Sectors such as IT, PSU Banks, and Energy have shown robust July performances. For instance, the IT sector gained 22.48% in July 2020, while PSU Banks surged 14.38% in July 2022. These sectors could drive returns again this year.
FII & DII Investments: The market has been buoyed by strong institutional flows in July 2023 and 2024. Similar levels of participation in 2025 could provide further support.
Domestic Economic Data: Investors will be tracking data like GST collections (June), auto sales figures, trade deficit, industrial and manufacturing output, HSBC manufacturing/composite/services PMI, fiscal deficit, infrastructure output, bank loan growth, and FX reserves. These indicators will offer insights into India’s economic health.
Global Triggers: Global factors such as speeches by US Federal Reserve officials, PMI reports from S&P Global Manufacturing/Composite/Services PMI, ISM Manufacturing New Orders and PMI, and Initial Jobless Claims may influence sentiment. Additionally, the end of the 90-day US tariff pause on July 9 could introduce volatility if any trade-related announcements are made.
Wrapping Up
July 2025 has the potential to be a strong month for the Indian stock market. Historically, Nifty and Sensex have averaged returns of 3.57% and 3.43%, respectively, in this period.
Adding to this positive backdrop, crude oil prices have dropped by over 11%, easing inflationary concerns. Meanwhile, the Indian rupee has appreciated by 1.3%, marking its best weekly gain since January 2023.
With Q1 FY26 corporate earnings expected soon, investor sentiment is on the rise. As noted in The Economic Times, Siddharth Khemka of Motilal Oswal believes, “Strong institutional inflows, the possibility of a US-India trade deal, RBI’s liquidity stance, FII return, and a good monsoon could all contribute to sustained market gains.”
*The article is for information purposes only. This is not investment advice.
*Disclaimer: Teji Mandi Disclaimer
