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Gold and silver gave way better returns than equities in 2025, even as benchmark indices posted their 10th consecutive year of gains. Gold rose 64.1 per cent, while silver rallied 148.5 per cent, their best year in terms of returns since 1979.
The yellow metal sprinted from ₹75,857 per 10 gram in 2024 to ₹1.34 lakh this year, while silver jumped from ₹86,017 per kg to ₹2.32 lakh per kg. Bitcoin declined by 5.2 per cent after rising by 121 per cent and 157 per cent in the previous years.
The benchmark Sensex gained 9.06 per cent while the Nifty rose 10.5 per cent.
The dollar returns for the Sensex and Nifty were 3.8 per cent and 5.2 per cent, respectively, with most major benchmark indices delivering better returns. The Sensex ended the last day of 2025 at 85,221, a gain of 0.6 per cent, while the Nifty ended the session at 26,130, a gain of 0.7 per cent. Sensex is 1.09 and Nifty 0.75 per cent away from the intraday highs it hit early December.
The broader Nifty Midcap 100 rose by 5.7 per cent while the Nifty Smallcap 100 declined by 5.62 per cent. But the returns by indices mask a starker reality of the rout in the broader markets. Nearly 60 per cent of the top 1,000 listed stocks have delivered negative returns. Markets had to grapple with earnings disappointments and uncertainty over US trade policy. The US imposed a punitive 50 per cent tariff on Indian goods in August, and negotiations for a trade deal have since failed to make any breakthrough.
“Despite weak earnings, markets held up because of the strong inflow from retail investors into domestic mutual funds. But weak earnings coupled with elevated valuations drove foreign portfolio investor selling," said Pramod Gubbi, co-founder of Marcellus Investment Managers.
Foreign Portfolio Investors (FPIs) were net sellers worth ₹1.6 trillion, while domestic mutual funds were net buyers worth ₹ 4.9 trillion.
Even policy measures such as the goods and services tax (GST) rationalisation and the Reserve Bank of India’s (RBI’s) interest rate reductions failed to excite investors, as they came after the tariff shock and merely cushioned its impact. Elevated valuations pushed investors to book profits on modest rallies.
The Nifty’s one-year forward price-to-earnings multiple stands at around 20.2 against its 10-year average of 21.1. But the Nifty Midcap 100 and Nifty Small Cap 100 are trading at much higher multiples than their 10-year averages.
A decisive breakout from the current levels will require positive surprises on both the US trade and earnings fronts.
“Going forward, the hope is that GST-led growth will materialise and earnings will recover. The challenge is whether the earnings stay through 2026 because we need a recovery in job creation, which will in turn boost consumption and in turn help private sector capex,” said Gubbi.
The Nifty PSU Bank index, which rose 30.5 per cent, and the Nifty Metal index, which rose 29.1 per cent, were the best-performing sectoral indices, while the Realty and Media indices were the worst performers.
Shriram Finance, which rose 72.4 per cent, was the best-performing Nifty stock, while Force Motors, which rose 216 per cent, was the best performer in Nifty 500.
Market experts said asset allocation is key to better returns next year.
“One should not get carried away with one asset class. Gold and silver are unlikely to give better returns, and small caps may spring a positive surprise in 2026,” said G Chokkalingam, founder of Equinomics.
