The Indian stock market concluded 2025 with a strong rally as benchmark indices posted significant gains in the final trading session. The Nifty 50 achieved a decisive breakout, supported by aggressive short covering and improved investor confidence as the January series commenced.

Market Performance Overview

The benchmark indices delivered robust performance in the year's final session:

The broader market participation was evident with both midcap and smallcap indices outperforming the benchmark, highlighting improving market breadth across segments.

Sectoral Rotation and Performance

The final session witnessed a clear rotation into cyclical and value sectors. Nifty Oil & Gas emerged as the star performer, rallying 2.60% led by heavyweight buying. In contrast, Nifty IT remained the sole laggard, reflecting cautious global technology sentiment.

Major Corporate Developments

Several companies announced significant business developments and order wins:

Infrastructure and Construction Orders

NCC's orders were distributed between buildings division (₹704.67 crores) and transportation division (₹532.00 crores).

Production Milestones and Capacity Additions

Several companies commenced commercial production at new facilities:

• Navin Fluorine: Started commercial production at Phase 1 of cGMP-4 plant at Dewas
• Everest Kanto Cylinder: Commenced commercial production at Gujarat unit
• Piccadily Agro: Started production at Chhattisgarh unit with 200 kilo liters per day capacity

Strategic Acquisitions and Investments

Currency and Bond Market Update

The rupee depreciated 9 paise to close at 89.88 against the US dollar in the final trading session of 2025. The currency declined 5% during 2025, making it one of the worst-performing Asian currencies due to persistent capital outflows from foreign investors and heightened dollar demand from importers. The yield on the benchmark 10-year government bond ended flat at 6.59%.

Derivatives Market Activity

Nifty January futures gained 0.71% to 26,304, trading at a premium of 175 points. Open interest in Nifty January futures increased by 1.24%. For options expiring on January 6, maximum call open interest was positioned at 26,400 while maximum put open interest stood at 26,000. No securities were placed in the ban period.

Foreign Portfolio Investors (FPIs) continued their selling spree on New Year's Eve, offloading Indian equities worth ₹3,597.38 crore on Wednesday, marking their seventh consecutive session of net selling. In stark contrast, domestic institutional investors (DIIs) demonstrated strong buying interest by purchasing ₹6,759.64 crore worth of shares, reflecting divergent market sentiment between foreign and domestic institutional players.

Consecutive Selling Streak

The latest selling session extends FPIs' consistent exit from Indian markets. On Tuesday, they had sold Indian stocks worth ₹3,844.00 crore, while on Monday, they offloaded Indian equities worth ₹2,759.89 crore. Last week, overseas investors engaged in a consistent selloff amounting to more than ₹4,500.00 crore, though the week prior saw FPIs as net buyers for three consecutive sessions.

Annual Exodus Pattern

The year has marked a major exodus of FPIs from the Indian market, with analysts attributing the exit to the decline in the rupee's value. Year-to-date, foreign investors have net offloaded Indian equities worth ₹1.66 lakh crore, amounting to an outflow of $19.00 billion from Indian equities. However, FPI net inflow in Indian debt stood at ₹58,000.00 crore or $6.60 billion, resulting in a total net outflow of ₹1.00 lakh crore for the first time since 2022.

Monthly Investment Trends

December witnessed significant overseas selling, with FPIs offloading over ₹22,000.00 crore worth of Indian equities. This compares to net selling of ₹3,765.00 crore in November, while October saw them as net buyers of equities worth ₹14,610.00 crore. The FPI sell-off sharpened notably in August, with selling exceeding ₹35,000.00 crore.

Market Performance

Despite the foreign selling pressure, Indian markets ended the year on a positive note. The Nifty 50 surged 190.75 points or 0.74% to settle at 26,129.60, while the Sensex jumped 545.50 points or 0.64% to close at 85,220.60. The rally was supported by aggressive short covering and improved investor confidence as the January series commenced. DIIs have been net buyers for close to 50 sessions, providing crucial support to market stability.