In the year 2025, Indian equity markets staged a choppy but ultimately resilient run. Early part of the year saw a decent sized correction largely on account of valuation concerns, slowing earnings growth and unexpected tariff related announcements.

Later in the year, the benchmarks hit fresh highs at points, supported by strong domestic flows and improving cyclical momentum, yet the advance was uneven across sectors and market-cap bands. Large-caps, led first by banks and heavyweight IT names outperformed and were later joined by Consumer names as the GST cut related spending revival began to take shape.

Capital flows told a mixed story. Foreign institutional investors (FIIs) were net sellers for much of the year but at the same time, retail participation via SIPs held up well, providing a steady domestic cushion to the markets with monthly SIP collections remaining sizable. Supply of fresh equity also continued to be strong with several large IPOs and elevated levels of promoter selling.

Finally, multi-asset portfolios benefited materially from the precious-metals rally that saw Gold and Silver reach multi-year highs, helping diversify returns and lift performance of multi-asset funds in a year where equity returns were generally sub-par.

Also Read: India's GDP Jumps 8.2% in Q2 FY26, Beating Estimates

We enter 2026 on a cautiously constructive global macro backdrop that includes expectations of a gradual Fed easing, benign energy prices, resolution to the Russia – Ukraine war as well end of tariff related uncertainty.