A food shopper browses for groceries ahead of the Thanksgiving Day holiday at an Albertsons supermarket in Redmond, Washington, U.S., November 24, 2025.
David Ryder | Reuters
The U.S. inflation numbers in November looked supremely encouraging, with the annual headline rate coming in 0.4 percentage points less than expected. But don’t get too happy about them yet.
It’s the first consumer price report released by the Bureau of Labor Statistics since the U.S. government shutdown ended: October’s figures vanished into the void because the agency was “unable to retroactively collect these data.”
The BLS added that November’s CPI “did not include 1-month percent changes for November 2025 where the October 2025 data are missing.” It also said that certain survey data were “carried forward to October 2025 from September 2025.”
Evercore ISI’s Krishna Guha said it appears the BLS “put in zero inflation in multiple categories” when calculating housing inflation in some cities.
In other words, it’s a noisy report. Federal Reserve Chair Jerome Powell once described setting interest rates as “navigating by the stars under cloudy skies.” With November’s CPI report, the stars aren’t just obscured by clouds — they could be mirages, unidentified flying objects, a seagull that picked up an LED light from the beach.
Nonetheless, investors celebrated the numbers. The CPI report, along with a 10.2% surge in Micron shares on the back of an expectation-busting earnings report, lifted major indexes.
Perhaps it’s the holidays suffusing the air with unbridled cheer. Or maybe it’s all rather like having a feast during Christmas — the calories only count in the new year.
— CNBC’s Sean Conlon contributed to this report.
What you need to know today
And finally…
The Bank of England (BOE) in the City of London, UK, on Monday, Dec. 15, 2025.
India is poised to become the world’s second-largest economy by 2075, according to Goldman Sachs.
Darren Robb | The Image Bank | Getty Images
India’s strong growth prospects and recent stock market boom has piqued investor interest, drawing attention and increasing exposure to a once ignored market.
“India’s growth story is greater than the average … Whatever the world is grappling with, it’s business as usual for India,” said Feroze Azeez, deputy CEO of Anand Rathi Wealth.
Major economies were hit by higher inflation during the Covid-19 pandemic, but India’s inflation was already elevated. The country’s inflation rate stood at 7.59% in January 2020, while that of other large economies like the United Kingdom and Japan were low, at 1.8% and 0.8% respectively in the same month.
Azeez said high inflation is a situation that India is used to and it has “always traveled the path of higher inflation and higher interest rates.”
In June, India’s inflation rate was 4.81%, which remains within the Reserve Bank of India’s tolerance band of 2% to 6%. The central bank has left interest rates unchanged at 6.5% since April.
“All the macro variables are stacking and we are in the growth cycle … There is a paradigm shift and flight of capital from Indian households savings to equity to contribute to the India growth story,” Azeez told CNBC’s “Squawk Box Asia” last week.
The International Monetary Fund recently raised its 2023 growth forecast for India, citing stronger growth in the fourth-quarter last year, powered by domestic investment.
Both the Sensex and Nifty hit all-time highs in July and analysts are confident the indexes will bring positive returns for years to come.
“Many people have said in the past that India is the place to invest in, but they have been disappointed because [the momentum] will start and it’ll suddenly die out,” said Soumya Rajan, CEO and founder of Mumbai-based Waterfield Advisors.
But recently there has been a “confluence of positive flows” from both domestic retail and foreign institutional investors due to an “amazing allocation towards equity investments,” Peeyush Mittal, portfolio manager at Matthews Asia, told CNBC.
More companies are also adopting a “China plus one” strategy and setting up manufacturing operations in India, boosting the country’s long-term outlook, Nilesh Shah, managing director at Kotak Mahindra Asset Management said.
“There is a combination of positive sentiments, higher flows, and backing from the fundamentals which is causing the Indian market to move higher … Overall investments in India are on revival mode,” said Shah.
“So whichever way one looks at the economic numbers, India appears as an oasis in the global desert,” he added.
Although India’s monsoon season and general elections in 2024 could create volatility in the coming months, analysts remain optimistic and recommended four sectors.
India’s financial industry has done well recently, Rajan said, adding the sector is the biggest contributor to the country’s capital markets.
“The corporate balance on banks is the best it’s ever been,” Waterfield’s Rajan said. “We’ve had an outstanding run in what we’ve seen in the last few years and a lot will continue to happen in this space.”
Earlier this month, IDFC First Bank said its board had approved its merger with IDFC Ltd., which the company estimated would increase standalone book value by 4.9% compared with its financials as of March 31.
This came days after India’s largest private lender HDFC Bank completed its $40 billion mega merger with Housing Development Finance Corporation, making it the world’s fourth largest bank by market cap.
Analysts said Indian banks also remained insulated from the Adani crisis. In February, short seller firm Hindenburg accusedthe conglomerate of decades of stock manipulation and accounting fraud.
“The fact that they weren’t caught on the wrong side of that entire trade was, was good. So clearly, their underwriting standards are looking much better,” she highlighted.
Matthews’ Mittal said India’s HDFC Bank and ICICI Bank are good buys and are set to continue taking market share from public sector banks. Shares of HDFC Bank have gained 1.4% so far this year, while ICICI Bank has jumped 11%.
Although Rajan was optimistic, she remains neutral on banks as the sector “had a really good run, so the exponential upside is not huge, but will be fair.”
Mittal also noted there are “decent” opportunities in non-banking financial names such as Bajaj Finance and Mahindra Finance.
Bajaj Finance has gained 11% since the start of 2023, while Mahindra Finance surged by 26% during the same time.
Rajan and Mittal are both optimistic on fast-moving consumer goods and mentioned Nestle India as a sector pick. The sector was “beaten down quite a bit” during the pandemic, but has shown strong recovery and positive growth in the short term, Rajan said.
Shares of Nestle India have climbed more than 15% since the beginning of the year, and both analyats expect they could continue to run further.
According to the World Bank, about 68% of India’s population is of working age (15 to 64 years old), a positive demographic dynamic for consumer spending.
“It’s as simple as consuming biscuits. If you extrapolate your biscuit consumption across a population of 1.4 billion, it’s still quite a lot,” Rajan said.
Shoppers purchase groceries at the upscale LuLu Hypermarket located in the Lulu International Shopping Mall in Kerala, India, on May 25, 2022.
Global companies are moving their manufacturing lines to India as more of them begin to see it as Asia’s alternative to China.
The country would hence highly prioritize ramping up its manufacturing capacity so it has the adequate infrastructure in place to be a leader in global supply chains, Kotak’s Shah pointed out.
“The China plus one trend means that a lot of global outsourcing is shifting, and we believe Indian manufacturing companies will be able to participate in global supply chains. The sector will do well in the next couple of years,” said Shah said.
An engineer works on a component at the Godrej Aerospace manufacturing plant, in Mumbai on July 10, 2023.
Punit Paranjpe | Afp | Getty Images
However, Rajan pointed out that India has a lot of catching up to do if it wants to match China’s manufacturing prowess.
Even though companies say that they are adopting a “China plus one” strategy, “that plus one has not necessarily been India, it could be other South Asian and Southeast Asian countries,” as the country is still grappling with shortfalls in its infrastructure, she said.
“The big play is of course around infrastructure and capital goods,” she added. “Whether it’s auto components or heavy engineering, these companies are expected to do well.”
If investors were to bet on which sector in India will continue remaining strong in the next three to five years, pharmaceuticals will be a good pick, according to Shah.
“The world is aging and needs cheaper competitive medicine, and Indian companies fit well,” Shah said. “When the world is looking for competitive healthcare, Indians through their doctors, medicines, treatment or cost of delivery, will be able to do better.”
However, Matthew Asia’s Mittal said that instead of buying into pharmaceutical companies, upstream companies such as Syngene will be a good investment opportunity. Although such companies do not directly sell pharmaceutical products, they are involved in the research, development and manufacturing of them.
Investor sentiment in China remains weak as the country continues to miss growth expectations, and there are clearly industries and companies in India that have benefited from that, Rajan said.
She emphasized that even if China’s economy rebounds more robustly in the next nine to 12 months, investors will remain interested in India.Rajan noted that investors can also include exposure to both economies in their portfolios.
Furthermore, Rajan noted domestic investors play a pivotal role in India’s stock market and that is “really what has kept markets more elevated.”
“It’s not as if our companies are necessarily looking for foreign markets or exports to survive or thrive.”
