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📰Rupee Wipes Losses, Nifty50 Turns Positive, India-African Naval Drills Start

Three stories on Indian markets that you can't miss.

March 24, 2025

Good evening, 

Welcome to the best way to stay up-to-date on India’s financial markets. Here’s what’s in today’s newsletter:

  • The Indian rupee saw a significant surge on Monday, rising to 85.50 against the U.S. dollar,

  • India's Nifty 50 index has bounced back from earlier losses this year, thanks to foreign investors buying stocks,

  • and India is set to hold its first-ever naval drills with several African nations this April, aiming to counter China.

Then, we close with Gupshup, a round-up of the most important headlines.

Have a question you want us to answer? Fill out this form and you could be featured in our newsletter.

—Shreyas, [email protected]

Market Update.

Rupee Wipes All Losses of 2025.

The Indian rupee saw a significant surge on Monday, rising to 85.50 against the U.S. dollar, erasing its losses for the year and marking levels last seen at the end of 2024. By the close of trading, the currency had strengthened 0.4 percent, settling at 85.64, a nine-day streak of gains. This rally was largely driven by persistent dollar sales from foreign banks and favorable inflows into Indian assets.

A notable contributor to the rupee's recent strength is the flow of dollars related to inter-company borrowings and the repatriation of corporate profits, which are common in March, the final month of India's financial year. Additionally, over $3 billion flowed into Indian bonds in March, boosting the rupee's position. Foreign buying of Indian stocks in recent sessions has further supported the currency.

In particular, a Mumbai-based trader noted that foreign banks were dominant sellers of the U.S. dollar, with little intervention from the Reserve Bank of India. This surprising shift also prompted exporters to sell dollars, adding to the momentum.

The Indian rupee’s performance has outpaced other Asian currencies this month, gaining 2.1 percent so far. Meanwhile, the benchmark Nifty 50 index also rebounded, gaining nearly 1.5 percent on Monday and recovering its 2025 losses. As India’s economy continues to benefit from strong foreign investment and an improving macroeconomic outlook, the rupee’s upward trend could persist, especially with expectations of further foreign capital inflows.

Nifty50 Turns Positive For 2025.

India's Nifty 50 index has bounced back from earlier losses this year, thanks to foreign investors buying stocks and people taking advantage of lower prices ahead of the earnings season. On March 24, the Nifty 50 went up by 1.32 percent, closing at 23,658.35, while the Sensex rose 1.4 percent to 77,984.38. Although both indexes have made some recovery, they are still about 10 percent below their highest levels from last September.

Positive news about inflation and industrial production has helped improve investor confidence. Experts believe that the market has now overcome its recent struggles, suggesting that the worst may be over. Foreign investors, who had been selling stocks for months, have started buying again, especially in the financial sector. Stocks like Kotak Mahindra Bank jumped 4.7 percent after a leadership change.

However, with the market rising quickly, some investors are getting cautious. The volatility index, which measures market uncertainty, spiked to its highest level since January. This has led some investors to protect themselves from potential risks of a market drop.

All sectors of the market saw gains, and smaller stocks also performed well, with small-cap and mid-cap indexes rising 1.1 percent and 1.3 percent, respectively. Big stocks like Reliance and HDFC Bank gained 2 percent and 1.7 percent, respectively. As the market continues to climb, experts warn that there could still be some risk of a pullback.

India Begins Naval Drills With African Nations To Counter China.

India is set to hold its first-ever naval drills with several African nations this April, aiming to counter China’s growing influence in the Indian Ocean. Ten countries will join the exercise, including Kenya, South Africa, Tanzania, Mozambique, and Madagascar. The drills will feature live fire exercises, as India steps up its presence in a region where China’s military and financial footprint has been expanding rapidly.

Historically, India and African nations have shared ties mainly through trade, but they’ve rarely collaborated militarily. This exercise marks a shift in that dynamic, as New Delhi seeks to assert itself as a key player in Africa's security landscape. For decades, Africa has largely been influenced by Western powers, but China’s growing presence has shaken things up. China has been heavily investing in Africa, from infrastructure projects to military bases, notably around the Horn of Africa.

India’s interest in strengthening ties with Africa isn't just about countering China, though. The Indian Ocean, with crucial shipping lanes running through countries like Mozambique and Madagascar, has always been a key strategic area for India. China’s naval presence in the region has been a growing concern, especially after it began sending warships for anti-piracy missions and securing access to important naval bases.

By holding these drills, India hopes to secure partnerships with African nations that hold strategic maritime positions, helping to curb China’s rapid advances. The move also fits into a broader shift in India’s foreign policy, which has been increasingly focused on strengthening relations with countries beyond its immediate neighborhood. This exercise is just the beginning, with more African nations expected to join in future drills, signaling India’s growing naval presence in the region.

Gupshup.

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Policy

See you Tuesday.

Written by Yash Tibrewal. Edited by Shreyas Sinha.

Disclaimer: This is not financial advice or recommendation for any investment. The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.