The year 2025 for global financial markets was less a straightforward economic report and more a dramatic film, complete with suspense, unexpected twists, and powerful character arcs. While the final equity returns were modest, the journey was anything but ordinary, mirroring the plotlines of iconic Bollywood cinema. From recurring trade wars and the shimmering promise of AI to the disciplined rise of domestic investors, the narrative was driven by human emotions of hope, frustration, and patience.
Plot Twists: Tariff Tensions and the Distant AI Star
The year opened with a familiar villain: escalating global tariff tensions. Just like the endless court delays in the film Damini, investors faced a cycle of "tareekh pe tareekh" (date after date), where resolutions were perpetually deferred. Each new threat pulled markets away from company fundamentals and back into reactive macro mode, causing sector leadership to flip-flop rapidly.
Meanwhile, Artificial Intelligence played the role of a captivating yet elusive lead. Much like the celestial 'Saiyaara', it dominated boardroom discussions and earnings calls, shaping visions of future profitability. However, its tangible benefits and productivity gains remained just out of reach, with clear costs but fuzzy timelines. Interestingly, India's market narrative diverged, powered more by domestic consumption and financialization than by pure tech hype.
Quiet Heroes: Domestic Discipline and Surprise Comebacks
Amidst the noise, a powerful, silent force steadied the Indian market: Domestic Institutional Investors (DIIs) and the relentless flow of Systematic Investment Plan (SIP) money. Mirroring the gradual transformation in Aashiqui's "Dheere Dheere," millions of small monthly investments built a formidable SIP book nearing ₹30,000 crore. This pool of domestic capital absorbed volatility, softened corrections, and instilled discipline, cooling down speculative excesses.
The year also witnessed a stunning comeback story. Silver, long overlooked, staged a Baazigar-style resurgence. Fueled by industrial demand from the energy transition and its precious metal status, its surge, including a sharp short squeeze in October, reminded everyone that dismissed assets often make the most dramatic returns.
Confident Entrances and a Widening Global Stage
India's IPO market in 2025 entered with the confident swagger of Akshaye Khanna in Dhurandhar. Large, new-age listings dominated, making bold statements about the market's depth and maturity. While debates on valuation sustainability raged, their sheer scale and confidence were undeniable.
Globally, the mantra "apna time aayega" from Gully Boy resonated beyond US equities. Investors, facing concentration risks, began seriously exploring other worlds. Europe showed stability, Korea benefited from tech cycles, and other overlooked markets saw incremental flows, signaling a gradual broadening of the search for returns.
In essence, 2025 was a mid-act, not a finale. The lesson, as always, is to stay invested, focus on the long-term narrative, and let the short-term drama play out on screen. The show, indeed, goes on.
Radhika Gupta is the MD & CEO at Edelweiss Asset Management Ltd (EAML). Views expressed are personal.
