Analysts said despite the headwinds, equity markets showed resilience, helped by strong support from domestic investors and macroeconomic stability, which was characterized by strong GDP growth.
“Despite outflows remaining an issue for foreign investors, the resilience of the market was demonstrated. One of the key drivers for the Indian market in 2025 was the presence of robust support from domestic investors,” said Nitin Rao, CEO of InCred Wealth.
Sensex Performance
Till December 29 this year, the 30-share BSE Sensex rose 6,556.53 points or 8.39 percent. The benchmark reached its record high of 86,159.02 on December 1.
The market capitalization (mcap) of BSE-listed companies has risen by Rs 30,20,376.68 crore to Rs 4,72,15,483.12 crore (USD 5.25 trillion) so far this year.
The mcap of BSE-listed companies had touched the coveted Rs 400-lakh crore mark for the first time in April last year.
Consolidation phase
The year 2025 can best be described as a year of consolidation and transition for Indian equities, said Ponmudi R, CEO of Enrich Money, an online trading and wealth technology company.
“After several years of strong double-digit returns, benchmark indices posted more muted gains, with Sensex and Nifty rising around 8-10 per cent this year. While these returns may seem modest compared to previous years, they came amid global headwinds, foreign fund outflows and valuation corrections,” he noted.
On the domestic front, markets have struggled with subdued corporate earnings growth, high valuations, a weakening rupee and continued outflows of foreign institutional investors, said Santosh Meena, head of research at Swastika Investmart.
These factors kept sentiment cautious despite a stable macro environment, he said.
Global headwinds
Globally, markets were affected by geopolitical tensions, rate-related uncertainties and changing interest rate expectations from the US Federal Reserve, Meena added.
In 2025, foreign investors pulled out a record Rs 1.6 lakh crore (USD 18 billion) from the stock market.
Pranay Aggarwal, managing director and CEO of discount brokerage Stoxkart, said Indian markets were supported by resilient economic growth, strong government capital expenditure and continued inflows from domestic investors.
However, periods of volatility emerged due to foreign fund outflows, higher valuations and global risk phases related to interest rates, geopolitics and currency movements, he said.
IPO boost
A record number of initial public offerings (IPOs) this year also helped markets post gains.
Among the largest motherboard IPOs of the year, Tata Capital’s Rs 15,512 crore issuance topped the list, followed by HDB Financial Services (Rs 12,500 crore), LG Electronics India (Rs 11,607 crore), Hexaware Technologies (Rs 8,750 crore), Lenskart Solutions (Rs 7,278 crore) and Billionbrains Garage Ventures (Rs 6,632 crore).
Domestic support
In India, consistent SIP inflows, increased retail participation and confidence in the long-term growth story have provided stability even amid global volatility, said Pranay Aggarwal of Stoxkart.
Reliance Industries is the most valued company in the country in terms of market valuation. The company has a market capitalization of Rs 20,91,173 crore, followed by HDFC Bank (Rs 15,25,457.75 crore), Bharti Airtel (Rs 11,86,978.75 crore), Tata Consultancy Services (Rs 11,77,199.05 crore) and ICICI Bank (Rs 11,77,199.05 crore). 9,60,478.36 crore) in the top five.
Looking back
“Against the backdrop of healthy returns over the 2020-2024 period, 2025 has proven to be a year of consolidation and mean reversal. Some markets traded at expensive valuations and this, coupled with an earnings slowdown and rising global uncertainties, led to a market correction during the first quarter of 2025, followed by a gradual recovery since April 2025 across large caps,” said Sunny Agrawal, Head of Fundamental Research at SBI Securities. said.
The Sensex was up 5,898.75 points or 8.16 percent last year. The market capitalization of BSE-listed companies had increased by Rs 77.66 lakh crore to Rs 4,41,95,106.44 crore by 2024.
In 2023, the market capitalization of BSE-listed companies rose sharply by Rs 81.90 lakh crore.
Published on December 30, 2025
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