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Stock Markets Bounce Back in Early Trade as GDP Grows Stronger-than-Expected in April-June

India's 7.8% Q1 GDP growth, driven by broad sector gains and rural demand, boosts investor confidence despite risks from upcoming U.S. tariffs affecting exports, analysts say.

  • India's economy grew by 7.8 percent year-on-year in the April-June quarter of 2025, with the stock market rebounding on September 1 in Mumbai.
  • Nomura analysts attributed the strong GDP growth partly to low deflators and front-loaded government spending, but noted inconsistencies with low inflation and slow credit growth.
  • The services sector, which accounts for two-thirds of the economy, expanded by 9.3 percent, while government services increased by 9.8 percent, bolstered by a substantial 52 percent year-on-year rise in government capital spending.
  • Shares of MIC Electronics Limited climbed more than 15 percent on the National Stock Exchange, reaching a peak of Rs 55 during intraday trading, and increased by 12.24 percent over the past two days amid positive market sentiment.
  • The growth signals robust momentum, but analysts caution the headline GDP may overstate underlying activity due to India's lack of a dedicated services deflator and low wholesale inflation.
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Latestly broke the news in on Monday, September 1, 2025.
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