Indian equity markets concluded 2025 on a positive note with a strong rally in the final trading session, led by metal and energy stocks amid government support measures and value buying. However, the year was marked by underperformance relative to global peers, driven by record FII outflows, rupee depreciation, and trade uncertainties, though domestic inflows provided resilience. Key themes included sectoral recoveries, commodity surges, and optimism for policy-driven growth in 2026.
Sensex and Nifty Rally Strongly in Final Session of 2025
Indian benchmark indices ended the last trading day of 2025 with significant gains, as the BSE Sensex rose 546 points to close at 85,220, while the Nifty 50 advanced 191 points to 26,130. This broad-based rally snapped recent losing streaks and was driven primarily by metal stocks following the government's imposition of safeguard duties on select steel imports to protect domestic producers. Energy and banking sectors also contributed strongly, with gains in stocks like JSW Steel and ONGC. Midcap and smallcap indices outperformed with 1% rises each. The rally trimmed monthly losses and provided a positive close to a challenging year marked by foreign outflows. Despite the session's strength, volumes remained thin due to year-end positioning. Analysts noted value buying and technical rebounds as key factors. Sectoral indices showed gains across most areas except IT and telecom. This performance signals potential momentum carryover into 2026 amid expected policy support. Overall, the session reflected resilience supported by domestic institutional buying. The positive close contrasts with global markets' subdued tone. Implications include boosted investor sentiment heading into the new year. Broader market breadth was healthy with advances outnumbering declines. This rally underscores the market's ability to recover on positive triggers despite yearly headwinds. Business Standard - https://www.business-standard.com/markets/news/stock-market-live-updates-december-31-sensex-today-nifty-gift-nifty-nse-bse-ipo-today-125123100066_1.html
Indian Markets Achieve Tenth Consecutive Annual Gain in 2025
India's equity markets recorded their tenth straight year of positive returns in 2025, with the Nifty 50 up approximately 10% and Sensex gaining around 9%, despite lagging Asian and emerging market peers. This milestone was supported by robust domestic inflows, resilient economic fundamentals, and selective sectoral strength in metals and PSUs. However, smallcaps underperformed with declines, reflecting valuation concerns and foreign selling pressure. Record domestic mutual fund SIPs absorbed much of the FII outflows. Analysts highlight improving earnings visibility and policy measures as drivers for potential outperformance in 2026. The year saw broad participation from retail investors via systematic plans. Midcaps posted moderate gains extending multi-year streaks. Structural factors like demographic advantages and reforms underpinned the gains. Global uncertainties and trade tensions capped upside. This consistent positive run demonstrates India's market maturity. Implications include sustained long-term wealth creation for domestic holders. Broader indices like BSE Midcap rose modestly. The achievement comes amid a record IPO boom raising nearly ₹2 lakh crore. Outlook remains constructive with expected rate cuts and fiscal support. Money Control - https://www.moneycontrol.com/news/business/markets/india-s-markets-clock-tenth-straight-gain-in-2025-as-policy-and-strategy-take-center-stage-hdfc-amc-s-navneet-munot-13750279.html
Government Imposes Safeguard Duties Boosting Metal Stocks
The Indian government announced safeguard duties of 11-12% on certain steel imports for three years, aiming to curb cheap inflows and protect local producers amid global oversupply. This triggered a sharp rally in metal stocks, with JSW Steel and Tata Steel among top Nifty gainers, rising up to 5%. The move supports domestic industry capacity utilization and pricing power. Sector indices surged over 2%, leading market gains in the final session. Analysts view this as positive for margins in a competitive environment. Combined with easing crude prices, it reduces input costs. Implications extend to related sectors like autos and infrastructure. The policy aligns with broader manufacturing push under Atmanirbhar Bharat. Metal companies' earnings outlook improves for FY26. This counters dumping concerns from certain origins. Broader market sentiment lifted on protective measures. Long-term benefits include investment in capacity expansion. The decision reflects responsiveness to industry feedback. Overall, it enhances sector attractiveness for investors. Reuters - https://www.reuters.com/world/india/indias-nifty-50-open-higher-foreign-outflows-could-cap-gains-2025-12-31/
Record FII Outflows Mark Challenging Year for Indian Equities
Foreign institutional investors recorded historic net outflows exceeding ₹1.58 lakh crore from Indian equities in 2025, the highest ever, driven by rupee weakness, elevated valuations, and global capital rotation. This pressured indices mid-year but was largely absorbed by record domestic inflows of over ₹86 billion. Outflows intensified in the second half amid US tariff concerns. Despite this, markets posted positive annual returns supported by local buying. Analysts expect moderation in selling with potential reversals in 2026 on earnings recovery. Primary market investments partially offset secondary selling. The exodus reduced foreign ownership to multi-year lows. Implications include increased domestic dominance in market flows. Structural growth story remains intact for long-term inflows. Trade deal progress could trigger reversals. This highlights vulnerability to global sentiment shifts. Broader diversification by FIIs toward other EMs observed. Outlook improves with anticipated policy easing. The year underscores resilience from retail participation. Economic Times - https://economictimes.indiatimes.com/markets/stocks/news/sensex-nifty-end-2025-as-worlds-worst-performers-can-2026-change-the-script/articleshow/126263345.cms
Rupee Ends Year Near Record Lows Amid Persistent Pressure
The Indian rupee closed 2025 weakened around 89-90 per dollar, depreciating over 4-5% annually, making it one of Asia's worst performers due to trade deficits, FII outflows, and dollar strength. RBI interventions limited sharper falls, maintaining orderly conditions. Monthly losses in December were capped despite hedging demand. The depreciation impacts import costs and inflation dynamics. Analysts anticipate stabilization in 2026 with potential trade deals and rate cuts. Interventions preserved forex reserves adequacy. Broader emerging currency trends influenced performance. Implications include competitive exports boosting certain sectors. Energy imports remain a drag. Forward premiums reflect ongoing caution. Global dollar dynamics key monitor. This pressures corporate unhedged exposures. Outlook tied to capital flow reversals. The year highlighted external vulnerabilities. Stability measures continue into new year. Reuters - https://www.reuters.com/world/india/rupee-bias-tilts-higher-final-day-year-supportive-asia-fx-momentum-2025-12-31/
Precious Metals Post Stellar Annual Gains in 2025
Gold and silver delivered exceptional returns in 2025, with gold up over 60% and silver surging nearly 150%, marking some of the strongest performances in decades amid safe-haven demand and industrial needs. Year-end profit booking caused volatility but annual averages hit records. Central bank buying and geopolitical tensions supported gold. Silver benefited from supply constraints and green energy demand. Implications for Indian investors include portfolio diversification benefits. Jewelery and investment demand remained robust domestically. This outperformance contrasts equity moderation. Outlook positive with expected monetary easing. Volatility likely persists short-term. Broader commodities context favorable. The surge reflects debasement hedge appeal. Industrial fabrication key for silver sustainability. This enhances alternative asset allocation. Historic gains underscore cyclical peaks potential. Monitoring central bank actions crucial. Reuters - https://www.reuters.com/world/india/gold-set-best-year-nearly-half-century-silver-heads-largest-annual-gain-2025-12-31/
Wall Street Posts Strong Annual Gains Despite Final Session Dip
US major indices ended 2025's last session lower in thin trading amid tariff uncertainties, but recorded double-digit annual advances with S&P 500 up 16%, Nasdaq 20%, and Dow 13%, driven by AI enthusiasm. This performance diverged positively from Indian markets. Implications include potential global risk appetite influence on emerging flows. Tech heavy gains highlight sector leadership. Year-end positioning contributed to dip. Broader economic resilience supported returns. This contrasts tariff-related volatility. Outlook for 2026 includes policy impacts. Cross-asset correlations observed. Positive US cues could aid Indian sentiment. The euphoria tempered by late uncertainties. Diversification trends evident. This bolsters global liquidity expectations. Monitoring Fed signals key. Strong close to challenging year. Reuters - https://www.reuters.com/business/us-stock-futures-inch-down-thin-trading-wall-street-eyes-yearly-gains-2025-12-31/
Record IPO Activity Highlights Vibrant Primary Market in 2025
India witnessed a blockbuster year for initial public offerings with over 365 listings raising nearly ₹1.95-2 lakh crore, marking a record and underscoring investor appetite for new issues. Mainboard and SME segments both active. This provided alternative avenue amid secondary market outflows. Quality issuances saw strong subscriptions. Implications for capital formation and entrepreneurship boost. Pipeline remains robust into 2026. Valuation discipline improved post moderation. Broader ecosystem maturity evident. This offsets FII secondary selling impact. Retail participation surged via IPOs. Regulatory oversight enhanced transparency. Sector diversity in listings observed. This supports economic growth financing. Outlook positive with sustained activity. The boom reflects confidence in India story. Monitoring listing gains trends crucial. Livemint - https://www.livemint.com
Robust Domestic Inflows Support Market Resilience
Domestic institutional investors, led by mutual funds, recorded record inflows exceeding ₹3 lakh crore via SIPs and overall buying, absorbing FII selling and stabilizing markets. This shifted ownership dynamics with DII holdings at highs. Retail participation underpinned breadth. Implications include reduced foreign dependence long-term. Structural flows via systematic plans sustainable. This cushioned volatility episodes. Broader financialization trend evident. Outlook strong with rising incomes. This contrasts global flow reversals. Key pillar for 2026 stability. Participation depth increased significantly. This enhances market depth. Positive for long-term orientation. The shift marks maturing investor base. Monitoring continuity essential. Money Control - https://www.moneycontrol.com/news/business/markets/
Outlook Brightens for 2026 with Expected Earnings Revival
Analysts project improved corporate earnings growth and policy support driving Indian equity recovery in 2026 following 2025's subdued performance amid outflows and uncertainties. Rate cuts, fiscal measures, and trade progress cited as catalysts. This anticipates renewed FII interest. Domestic demand revival key. Implications include potential outperformance. Valuation compression aids attractiveness. Broader capex cycle resumption expected. This follows structural reforms yield. Global easing supportive. Sectoral rotation likely. The optimism tempers near-term caution. Monitoring budget cues crucial. This positions for multi-year upcycle. Positive sentiment building gradually. Economic Times - https://economictimes.indiatimes.com/markets/stocks/news/