In its latest Greed & Fear report, Jefferies called 2025 a year of “healthy consolidation” for Indian equities. Despite foreign investors holding lower positions, India remains the strongest structural growth story in global markets.

Jefferies noted that domestic inflows from SIPs and mutual funds will absorb most foreign inflows. This support should help the market maintain momentum. The firm also expects a fresh rally in 2026 as economic growth picks up.

The report highlighted GST cuts that could boost demand and liquidity. It added that the US Federal Reserve’s recent rate cut raises chances of the RBI easing rates again this year.

Jefferies said India’s small- and mid-cap stocks continue to show strong earnings growth, even with higher valuations. This justifies investor positioning in the segment. Combined with strong demand, corporate profitability, and policy support, India stands out as the most attractive growth story in global equities.

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