Defence and Realty Lead Indian Market Gains in May 2025
Indian markets ended May 2025 on a strong footing, with equity benchmarks advancing across the board. The Nifty Microcap 250 surged 12.10%, the Smallcap 250 climbed 9.59%, and the Nifty Midcap 150 rose 6.30%. The Nifty 50 gained 1.71%, while the Nifty 500 rose 3.50%, driven by strong performances in key sectors including defence, realty, industrials, financial services, and consumer discretionary.
Defence stocks led sectoral performance in May, rallying 21.8%—the strongest gain among all sectors. According to Motilal Oswal, “The defence sector showed a growth of 21.84% in May 2025 with 30.78% growth over the past year.” The surge reflected continued investor interest in government-led defence indigenisation and robust order visibility.
The real estate sector surged 7.17% in May, extending its strong uptrend. Buying accelerated towards the end of the month and into early June, helped by easing liquidity conditions. On June 6, the segment rose nearly 5% in a single session after the Reserve Bank of India announced rate and CRR cuts.
Metal stocks advanced 7.12% in May, supported by strength in global commodity markets and firm pricing. Despite medium-term volatility, investor appetite returned as select counters attracted value buying.
Energy stocks rose 4.78% during the month. The gains came despite volatility in crude prices and geopolitical developments earlier in the year. The sector has now posted a 19.52% return over the past year, according to brokerage data.
Information technology stocks saw a solid recovery, gaining 4.27% in May. The sector had lagged in recent months, but strong quarterly updates from select large-cap firms helped boost sentiment.
Auto stocks rose 4.56% in May. Firm monthly sales data and a recovery in rural demand underpinned the gains. Over the past year, the sector has gained nearly 13.8%.
The banking index moved up 1.20% in May. Gains were moderate as investors awaited cues on margins and loan growth. However, the outlook turned positive after the RBI’s rate move in early June sparked hopes of renewed credit offtake.
Consumer durables rose 0.70% in May, with select names showing strength on the back of improving rural and semi-urban demand. However, high valuations and patchy volume trends kept upside limited.
FMCG stocks declined 2.06% in May—one of only two sectors that ended in the red. According to Motilal Oswal, “All major sectors showed a positive trend except for FMCG and Utilities, which saw a downtrend of -0.09% and -0.04% respectively.”
Healthcare fell 1.16% in May, underperforming the broader indices. Profit-booking in pharma names and muted earnings commentary weighed on the sector, despite one-year gains of 9.5%.
