📊 India & Global Markets 2025 Review + 2026 Outlook

Performance of Equities, Mutual Funds, IPOs, ETFs, Commodities & Money Markets

Published December 31 2025 – InvestAndEarn.in

As 2025 draws to a close on December 31, the Indian financial markets have delivered a mixed bag of results. Amid global uncertainties, domestic policy shifts, and sector-specific volatilities, investors navigated through highs in commodities and IPO fervor, tempered by subdued equity gains and corrections in overvalued segments. Drawing from NSE India data and broader market analyses, this blog dissects the performance of key asset classes—equities, mutual funds, IPOs, ETFs, commodities, and money markets—for the calendar year 2025. We'll also peer into 2026, where experts foresee a more optimistic trajectory fueled by earnings recovery, policy stability, and global tailwinds.

Whether you're a seasoned investor on InvestAndEarn.in or just starting your journey, these insights can help refine your portfolio strategy. Let's dive in.

🟠 1. Equity Markets in 2025: Resilient but Uneven

In 2025, Indian equities showed moderate gains but faced headwinds from foreign investor selling and profit-booking activity.

Equities: Steady Large-Caps Amid Mid- and Small-Cap Volatility

The equity markets on NSE India reflected cautious optimism in 2025, with large-cap indices like the Nifty 50 delivering modest single-digit returns. The benchmark index closed the year around 10.5% higher year-to-date (YTD), driven by resilient banking and financial services sectors but dragged down by corrections in high-valuation mid- and small-caps. Foreign Institutional Investors (FIIs) turned net sellers in H2 amid global rate hikes, while Domestic Institutional Investors (DIIs) provided support through consistent inflows.

Key highlights from NSE indices (approximate YTD returns as of Dec 26, 2025, based on ETF proxies and market wraps):

Sectors like banking (up 14.5%) and autos (up 16%) outperformed, while realty and consumer discretionary lagged due to high base effects. Overall market cap on NSE grew to ~₹450 lakh crore, but volatility (India VIX averaged 18) tested retail nerves.

✔️ Domestic indices ended the year near record highs, with periods of strong rallies driven by financials and cyclical sectors. However, markets trimmed late-year gains due to profit taking as trading volume thinned. Reuters

✔️ Foreign Institutional Investors (FIIs) withdrew significant capital (~₹2 lakh crore), pressuring sectors like IT and FMCG. The Times of India

🔎 Key Takeaways – Equities 2025

• Domestic flows cushioned volatility thanks to retail and institutional participation.

• Certain sectors — banking, financial services, defence — outperformed broad markets.

• Mid and small caps delivered mixed returns amid shifting investor preferences.

👉 Overall: Equities showed relative resilience, with investor confidence supported by long-term SIP flows despite macro headwinds.

📈 Indian stock market outlook 2026 – EquitiesAnalysts forecast that the Nifty could climb to ~29,500 by end of 2026, driven by corporate earnings revival and supportive macro conditions. Strategy Tip: Focus on quality stocks backed by earnings growth, diversified across financials, industrials, and consumption themes.

🟢 2. Mutual Funds: Record Flows & Diversification

Mutual funds in India continued strong growth in 2025.

📌 Total Assets Under Management (AUM) surged over 21%, exceeding ₹80 lakh crore. Passive funds were key drivers. The Economic Times

📌 Net equity investments crossed ₹4 trillion during the year, highlighting robust domestic buying via SIPs even as FPIs exited equities. Angel One

📌 SIP inflows hit record levels (~₹3 lakh crore), underscoring retail commitment to systematic investing. Outlook Money

Mutual Funds: Commodity Shine, Equity Stability, Debt Reliability

Mutual funds saw robust AUM growth to ₹81 trillion by November 2025, up from ₹65.74 lakh crore at FY25-end (March 2025), propelled by SIP inflows crossing ₹25,000 crore monthly. Equity funds benefited from large- and mid-cap focus, but small-caps disappointed. Commodity-linked schemes stole the show, with silver funds surging on global safe-haven demand.

Category-wise average returns (calendar 2025):

Laggards included small-cap funds, down due to rich valuations unraveling, while credit risk debt funds topped at 20.77% for select schemes. SPIVA data showed 58% of bond funds underperforming benchmarks in H1, highlighting active management's challenges.

📊 Fund category performance:

• Flexi-cap and auto and banking sector funds outperformed broader categories.

• Mid & small caps saw lower inflows at times, while gold & defence-oriented schemes attracted interest. Outlook Money+1

📅 Indian stock market outlook 2026 – Mutual Funds

Experts suggest mutual funds will remain preferred for long-term allocation. Multi-asset & diversified approaches are expected to outperform narrow sector bets. The Financial ExpressActionable Insight: Retain disciplined SIPs, and include hybrid or balanced funds for risk mitigation.

🟡 3. IPO Market: Historic Fundraising but Mixed Returns

📈 Record fundraising marked 2025 — India’s IPO market raised a near-unprecedented ₹1.7–1.8 lakh crore with over 100 deals. The Economic Times+1

🚀 Top IPO performers included Meesho, which delivered explosive returns (~95%) post-listing. The Economic Times

📉 However, average listing gains were muted compared to earlier years, reflecting higher valuations and investor selectivity. Whalesbook

IPOs: Record-Breaking Frenzy on Dalal Street

2025 was a blockbuster for primary markets, with over 365 IPOs raising a staggering ₹1.95 lakh crore—nearly an IPO per day and surpassing 2024's records. Mega issues from sectors like fintech, telecom, and hospitality dominated, with five deals each over $1 billion (₹8,300 crore). Listing gains averaged 25%, though H2 saw some underperformance amid equity caution.

NSE-listed IPOs contributed ~70% of the volume, underscoring the exchange's dominance. Total equity fundraising dipped 3% YoY to ₹4 trillion, but IPOs offset QIP and rights issues. Standouts included high-profile debuts that boosted retail participation via platforms like InvestAndEarn.in.

🔮 2026 IPO Outlook

Industry analysts expect the IPO market in 2026 to be more selective with higher quality listings, emphasizing profitability and sustainable business models. Swastika InvestmartInvestor Note: Prioritize fundamentals over hype and avoid chasing subscription numbers alone.

🟣 4. ETFs (Exchange-Traded Funds): Targeted Gains

Indian ETFs had notable successes in 2025, especially in sector-focused themes.

🥇 Top performers included defence ETFs delivering ~30–35% returns, along with Hang Seng and financial services ETFs. Angel One

📌 Precious metal ETFs (especially silver) saw robust inflows due to surging commodity prices. Outlook Money

ETFs: Passive Powerhouse with 12% AUM Growth

ETFs emerged as the growth story, with AUM surging to ₹7.2 lakh crore by year-end, a 12% rise from ₹6.45 lakh crore in 2024—now 17% of total MF AUM. Retail inflows jumped 35% YoY, aided by zero-commission trading and SEBI's ETF-friendly norms. Equity ETFs held ₹5.6 lakh crore, while gold ETFs hit ₹30,000 crore amid prices touching ₹72,000/10g.

Top performers (1Y returns):

Debt ETFs like Bharat Bond added stability at 12.3% returns. Daily turnover on NSE/BSE reached ₹3,500 crore.

📌 Outlook 2026 – ETFs

ETFs remain efficient vehicles for sector and asset class exposure. Continued demand is expected for:

• Commodity ETFs (gold, silver)

• Thematic and international ETFs

• Smart beta & diversified index funds

Tip: Use ETFs for tactical exposure and diversification without strong stock selection risk.

🔷 5. Commodities: Precious Metals Steal the Show

Global commodities in 2025 were dominated by a precious metals rally.

📈 Gold and silver both surged to record levels, with silver posting extraordinarily strong gains globally and in India. Reuters+1

📊 Copper also showed impressive strength, benefiting from industrial demand and supply deficits. The Economic Times

Commodities: Silver Sparks, Gold Gleams on MCX/NSE

Commodity derivatives on MCX (with NSE's limited agri focus) boomed, with silver prices up ~120% YTD on industrial demand and geopolitical tensions, driving related MFs/ETFs to 128% returns. Gold rose 35%, crude oil fluctuated 10% amid OPEC cuts, and base metals gained 15% on infra push. MCX volumes hit record highs, with its stock up 48% YoY.

NSE's commodity indices (e.g., via ETFs) mirrored this, with precious metals leading. Total traded value: ~₹150 lakh crore.

📅 2026 Commodity Forecast

Analysts forecast continued momentum in gold & silver driven by safe-haven demand and structural demand catalysts. The Times of IndiaOil is expected to remain under pressure due to supply dynamics and demand concerns. IG

Strategy Suggestion: Allocate a portion of portfolios to precious metals or related ETFs for defensive diversification.

🟤 6. Money Markets & Fixed Income

In 2025, short-term interest rates remained attractive as global central banks navigated inflation dynamics. Liquidity in liquid and ultra-short funds remained useful for capital preservation and tactical cash allocation.

Money Markets: Steady Yields in a High-Rate Environment

Money market instruments offered reliable 6-7% yields, with funds averaging 7.01% returns—outpacing inflation but trailing equities. Repo rates held at 6.5%, supporting liquid and ultra-short funds at 6-7%. Overnight funds yielded 5.56%, ideal for parking amid volatility. AUM in money market funds grew 15%, reflecting risk aversion in H2.

Outlook 2026:

• With expectations of gradual rate cuts in some economies and sticky inflation elsewhere, short-term instruments may offer better risk-adjusted returns.

• Laddered debt strategies can help stabilize overall portfolio volatility.

📝 Summary: 2025 vs. 2026 Indian stock market outlook 2026

2026 Outlook: Brighter Horizons with Cautious Optimism

Looking ahead, 2026 shapes up as a rebound year. Equities could deliver 12-15% returns, buoyed by 7-8% GDP growth, healthy corporate earnings (EPS growth 15%), and potential US-India trade deals. Large-caps remain core, with mid-caps poised for re-rating; avoid overvalued small-caps.

Mutual funds: SIPs to hit ₹30,000 crore/month, AUM eyeing ₹100 trillion. Focus on flexicaps and multi-assets for 10-12% equity returns; debt steady at 6-7%.

IPOs: $20 billion (₹1.7 lakh crore) pipeline, with 200+ listings in fintech, renewables, and hospitality—continuing the boom but watch valuations.

ETFs: Breakout potential, AUM to ₹10 lakh crore at 25% CAGR; gold and thematic (PSU, green energy) to shine.

Commodities: Silver/gold up 15-20% on global uncertainty; energy metals benefit from EV/infra boom.

Money markets: Yields to ease to 5.5-6.5% with anticipated rate cuts, favoring short-duration for stability.

Pro Tip for InvestAndEarn.in Users: Diversify via SIPs in index funds/ETFs (low fees, NSE-listed). Rebalance towards quality equities and commodities for 2026 upside. Monitor FII flows and inflation.

2025 tested resilience; 2026 rewards patience. Stay invested, stay informed—happy investing!

📌 Final Investing Takeaways

✅ Stay diversified across assets — equities, funds, ETFs, metals & fixed income.✅ Use SIPs and disciplined strategies — they helped dampen volatility in 2025.✅ Focus on fundamentals — especially for IPOs and individual stocks.✅ Consider defensive allocations like gold and short-term debt in uncertain markets.

Data sourced from NSE India, AMFI, and market reports as of Dec 27, 2025. Past performance isn't indicative of future results. Consult a advisor before investing.