The first year of the Modi 3.0 government has been a rollercoaster ride for Indian equities, marked by sharp volatility, sectoral rotations and broader markets outperformed their benchmark peers.
A key highlight of the year was the government's continued emphasis on fiscal discipline. To strike a balance between sustaining economic growth and managing the fiscal deficit, the centre underscored its commitment to macroeconomic stability. The strategic alignment drove outperformance in sectors like defence, capital goods and electric vehicles, while global headwinds and valuation concerns weighed on IT, selecting public sector units, and auto stocks.
On the geopolitical and trade front, uncertainty stayed with the re-imposition of Trump-era tariffs, rekindling concerns over global trade dynamics. Despite external challenges, the Modi administration doubled down on its push for defence indigenisation — a strategy that gained credibility with the success of Operation Sindoor, showcasing India's growing self-reliance in strategic capabilities.
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Meanwhile, market liquidity dynamics revealed that domestic institutional investors remained strong buyers through the year, cushioning the impact of persistent foreign portfolio outflows amid weak earnings growth.
How Indices Performed
In the first year of Modi 3.0, spanning from June 9, 2024, to June 6, 2025, the Indian equity markets delivered a mixed performance across indices. The Nifty and Sensex rose by 7.5%, reflecting moderate gains in large-cap stocks.
The Bank Nifty outperformed significantly, delivering a strong return of 13.65%. The Nifty Midcap 150 registered a healthy 11% gain, showcasing strength in the broader midcap space. Meanwhile, the Nifty Smallcap 250 posted a more modest return of 6%.
Markets Witnessed Significant Volatility Under Modi 3.0
The first year of Modi 3.0 saw significant volatility in the Indian markets. It began with a sharp rally on June 3, 2024, as exit polls projected a comfortable NDA win, driving the Nifty and Sensex to record highs. However, the actual election results on June 4 revealed a narrower-than-expected NDA majority, triggering the worst single-day market drop since 2020, with indices plunging 5–8%.
Over the first 100 days (June 9 – Sept. 17, 2024), the Sensex surged by 6,500 points (8.4%) and the Nifty gained 2,087 points (9%), buoyed by strong performances in defence, electric vehicles, real estate, infrastructure, pharma and IT sectors.
The October to December period saw heightened sectoral volatility, followed by a sharp downturn in January–February 2025, where the Sensex dropped over 10,000 points (11.8%) and the Nifty fell 13% from their September highs. This turbulent phase culminated in a steep single-day crash on April 7, 2025, when the Sensex plummeted by 3,291 points (4.37%) and the Nifty lost 1,058 points (4.62%), erasing nearly Rs 19 lakh crore in investor wealth.
How Sectoral Indices Performed
On the sectoral front, the Nifty Financial Services index led the gains with a strong return of 21.2%, followed by Nifty Bank at 13.7%, reflecting robust momentum in the financial space. Pharma and IT sectors also delivered positive returns, with Nifty Pharma up 9.8% and Nifty IT rising 8%.
On the flip side, Nifty Oil & Gas slipped 2.2%, while PSU Banks and FMCG fell by 3.2% and 3.8%, respectively. Metals, Realty, and Auto sectors saw deeper cuts, with Nifty Metal down 4%, Nifty Realty 4.1%, and Nifty Auto declining 5.5%. The worst performer was Nifty Media, which plunged 15%, indicating sustained weakness in the sector throughout the year.
Top Gainers, Losers In Nifty 50
In the Nifty 50, the top gainers during the first year of Modi 3.0 were led by Eternal, which delivered a return of 44%, followed by Bharat Electronics with a 38% gain, and Shriram Finance, which rose 37%, reflecting strong investor confidence in select defence and financial stocks.
The index also saw notable underperformers. IndusInd Bank was the biggest laggard, plunging 45%, while Tata Motors and Hero MotoCorp declined by 27% and 25%, respectively, indicating pressure in the auto and banking space.
Top Gainers, Losers In Nifty Midcap 150
In the Nifty Midcap 150, the top gainers during the first year of Modi 3.0 were led by BSE, which delivered a whopping return of 231%, followed by One 97 Communications with a 147% gain and Mazagon Dock Shipbuilders, which rose 118%.
The index also saw notable underperformers. Vodafone Idea was the biggest laggard, plunging 56%, while Ola Electric Mobility and Aditya Birla Fashion declined by 46% and 34%, respectively.
Top Gainers and Losers in Nifty Smallcap 250
In the Nifty Smallcap 250, the top gainers during the first year of Modi 3.0 were led by JSW Holdings, which delivered a whopping return of 251%, followed by PG Electropast with a 166% gain, and Wockhardt, which rose 164%.
The index also saw notable underperformers. Raymond Lifestyle was the biggest laggard, plunging 63.5%, while Sterling and Wilson and KNR Construction declined by 61% and 44% respectively.
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