Investment Ideas Note – December 2025 – Wallet Wealth

 

Investment Ideas Note – December 2025 – Wallet Wealth

Market Review  

The upward momentum in November was supported by improving corporate earnings, steady domestic demand, and stable macro fundamentals — including benign inflation, pro-growth policies, and supportive liquidity conditions.  

Elevated valuations mean future returns may be more modest — investors should be selective and possibly lean toward companies with strong earnings potential, not just high sentiment.  The BSE Sensex delivered a positive 2.1% during the month of November 2025.

Index Performance – Nov 2025  

Index	1 Nov 2025	30 Nov 2025	Change
BSE Sensex	83,938	85,706	+2.10%
BSE Midcap	47,044	47,211	+0.35%
BSE Small-Cap	53,876	52,053	-3.30%

 

Monthly Returns (%):

Index	October Return
Nifty 50	+1.87%
Nifty Midcap 150	+1.61%
Nifty Bank	+2.79%

 

A brief rally driven by global equity support and trade optimism moderated toward month-end due to external trade concerns and valuation caution. Banking and PSUs outperformed on credit traction and supportive monetary policy.

 

FII & DII Flows – October 2025

Category	Equity (₹ Cr)	Debt (₹ Cr)	Net Flow
FII	+3,32.00	-4,156.00	-3,824.00
Mutual Funds (DII)	+39,950.00	-71,048.00	-31,098

Both FIIs & DIIS were positive investors in Equity during Oct whilst the DII's were negative in Debt. Domestic flows remained the positive,**

 **supported by strong SIP momentum.

 

Macro-Economic Dashboard – India (as of November 2025)

Indicator	Latest Reading	Trend / Insight
GDP Growth (Q2 FY25E)	~8.2%	Strong domestic demand; manufacturing & exports improving
CPI Inflation – Oct-25	~0.25%	Moderating food inflation; RBI maintains vigilance
Core Inflation – Oct-25	~4.3%	Benign core keeps policy path stable
Repo Rate – Nov-25	5.25%	RBI cut the repo rate by 0.25% in Dec-2025
PMI Manufacturing –    Nov-25	~56.6	Solid expansion; capex & order book strength
PMI Services Nov-25	~59.8	Domestic services momentum robust
GST Collections (Nov '25)	~₹1.7 lakh cr	Consistent strength, reflects healthy consumption/formalization
Forex Reserves	~$686 bn	Comfortable reserve cover; supports currency stability

India remains a growth outlier, though export-linked sectors and oil-intensive industries may face near-term pressure.

 

Why our Equity Markets are mis-behaving ?

1)  Persistent FII selling. FIIs have sold over USD 30 Billion in the past 14 months. Year till date they have sold around USD 25 Billion in 2025 compared to USD 15 Billion in 2024. FII’s now hold 16.71% of the NSE listed equities, at a 13 years low.

2)  INR has drastically depreciated to USD following the FII outflows & no direction on the US India Trade Deal outcome yet. The recent trade deficit of USD 42 Billion & record high Gold Import has added a lot of pressure to the INR. INR is clearly now undervalued to USD, a strong recovery is expected.

3)  FII’s investment cycles have become erratic, short & unpredictable. Further pressuring the INR.  

4)  December is rarely a good month for FII’s as being a Christmas month, makes it a lazy activity month.  

5)  Fed Out come this week is also keeping the markets in a jitter, can expect a 25 basis FED cut, probability of atleast of 60%

6)  Too many IPO’s are redirecting the money from Domestic retail & FII’s as investors.  

 

Points to Ponder – Growth Trajectory  

•       Fiscal deficit: 9.2% → 4.4% (FY21 to FY26E)

•       NPAs down: 5.3% → 1.4%

•       Fastest-growing major economy

•       Recent move by RBI to inject INR 1 Lac crore through OMO’s and a USD/INR 5 Billion Swap will provide enough liquidity within the banking system. Aided by a 25 basis Repo Cut will have help the lending rates to go lower.

•       With the 8th Pay commission coming in, GST rate rationalisation & tax slab changes, it will continue to give big boost to the Indian Consumption Story and will also continue to drive double digit Corporate earnings growth. Indian consumption account for 65% of our economic activity.  

•       GDP base year change from 2011-12 to 2022-23 will help reflect the actual GDP growth for India in Q3, as we continue to evolve dynamically as an economy.  

•       Capex revival supported by clean bank balance sheets & low leveraged corporates

•       Retail sales up 11% YoY driven by GST cuts + festive demand

RBI Monetary Policy  

The Monetary Policy Committee (MPC) cut the policy repo rate by 25 basis points — lowering it from 5.50% → 5.25%

Standing Deposit Facility (SDF), Marginal Standing Facility (MSF) / Bank Rate have been adjusted accordingly (SDF ~ 5.00%, MSF / Bank Rate ~ 5.50%) under new policy rates.  

RBI retained its policy stance as “neutral”, signalling readiness to adapt further as economic conditions evolve.  

 

Investment Strategy – Our View

Equity Allocation View

•       Market-cap-to-GDP ~128.89% → avoid lump sum, stagger over 20–24 weeks

Interpretation: Markets remain above historical average but justified by earnings strength, formalization, and financialization of savings. Valuations require disciplined & staggered deployment.

•       Preferred themes:

o    Large-cap & Hybrid funds for stability 

 Banking & Financials, Business Cycle → tactical exposure  IT & Digital → Contrarian Approach

•       Avoid fresh small-cap allocation unless 7+ year horizon

Debt Market – Nov 2025

•       G-Sec: 10Y benchmark around 6.87%  

•       Context: RBI liquidity operations earlier in the year and stable policy stance keep duration risk manageable; FPI bid in debt has stayed supportive.  

Debt Allocation View

•       <1 Year: Money Market / Ultra-Short Funds

•       ~3 Years: Banking & PSU Debt, high-quality corporate bonds

•       Avoid Credit Risk segment due to volatility.

Gold and Silver Outlook – Nov 2025

Long-term portfolio: Maintain a core allocation (5–10%) in gold and Silver — as a hedge, store of value, and portfolio diversification tools (especially in uncertain macro environment).

Accumulate on dips / corrections: Given volatility and potential short-term pullbacks, using cost averaging/SIP-like purchases may smooth entry & mitigate timing risk.

Short-to-medium term tactical calls: Near-term rallies may be exploited if global cues remain uncertain — but avoid over-exposure to gold-only bets (balance with debt/equities).

Combine with other assets: Use gold as a stabilizer in a diversified portfolio — pairing with equities, fixed income, or balanced funds to manage overall risk-return.

 

Contact Information

 

For more details and Investing

 

S.Sridharan, Founder, https://www.walletwealth.co.in/ 

 

For portfolio guidance, contact your advisor at 9940116967

Wallet Wealth LLP | SEBI Registered Investment Advisor

2nd Floor, No.8A, 2nd Main Road, Nanganallur, Chennai – 600 061 Phone: 044 – 4861 2114

 

Disclaimer

This document is confidential and intended solely for clients. Information is believed reliable but not guaranteed. Views are subject to change without notice and do not constitute investment advice without consultation. This is for the investor information and not an advice.