The Indian stock market has spent most of 2025 navigating a tricky landscape. Even as global markets showed pockets of strength, the stock market today data highlights a different story at home. With the Nifty 50 performance rising just 5% year-to-date, India now stands as the worst-performing major market this year.

And yet, beneath the surface of muted returns, there’s a larger narrative—one shaped by earnings shifts, valuation swings, foreign inflows, and a sharp difference in how India handled global volatility.

Market Performance: India’s Broad Indices Lose Steam

Through 2024, the market looked unstoppable. But by 2025, that momentum had cooled sharply.

Index comparison shows how deep the slowdown runs:

In late 2024, every segment—largecaps, midcaps, and smallcaps—was powering ahead. A broad rally had pushed returns to 31%, 42%, and 45%, signalling strong domestic momentum.

But by November 2025, the mood flipped. The Nifty 100 and Nifty Midcap 150 barely held on with 3% returns, while the Nifty Smallcap 250 slipped -5%, marking a clear loss of investor appetite across riskier segments.

This pullback forms the backbone of the market’s subdued sentiment today.

Main News: Four Key Factors Behind India’s Market Underperformance

Despite India’s stable economic backdrop, several market-specific pressures weighed heavily on returns.

1. Valuation Reset Across Market Segments

Valuations didn’t collapse—but they did cool noticeably.

Median P/E trends (Oct’24 → Oct’25):

• Nifty 50 Index: 32.1 → 33.2
• BSE Midcap Index: 48.8 → 41.6
• BSE Smallcap Index: 45.3 → 37.7

Large caps stayed relatively steady, but midcaps and smallcaps saw meaningful moderation. The steam that once powered smaller companies had clearly eased.

2. Corporate Earnings Cycle Shows Sharp Slowdown

Profit growth, once a major strength in FY23 and FY24, softened considerably.

PAT (Profit After Tax) 3-Year CAGR

• Q1 FY24: 47%
• Q2 FY24: 48%
• Q1 FY25: -1%
• Q2 FY25: -6%

The numbers tell a clear story. After two strong years of robust earnings growth, FY25 turned into a testing period. Rising costs, slower global demand, and uneven margins dragged profitability down.

3. Volatility Divergence: India Held Steady as the World Shook

One of the standout trends of the past year has been India’s calm in a stormy global environment.

Global VIX vs India VIX (Sep’24 → Oct’25):

• Global VIX: 15.4 → peak near 48 → eased to ~20
• India VIX: 12.0 → 12.4

Global volatility spiked sharply around early 2025, but India’s volatility index barely moved. This stability offered a surprising cushion, even as returns stayed muted.

4. FPI Inflows Make a Comeback After a Tough Year

Foreign Portfolio Investors (FPIs) had pulled out sharply in late 2024. But by October 2025, fresh inflows began trickling in again.

FPI Trend (Sep’24 → Oct’25):

• Strong inflow in Sep’24
• Sharp outflow in Oct’24
• Renewed inflow by Oct’25

The bounce-back was supported by shifts like:

• Crowding in Korea & Taiwan
• A weaker USD is aligned with global rate cuts.
• Short-lived tariff concerns
• Moderating valuations in India

This renewed interest signals that global investors are slowly finding their way back into Indian equities.

Company & Market Details: How India’s Indices Mirror Broader Market Sentiment

The performance of the Nifty 100, Nifty Midcap 150, and Nifty Smallcap 250 essentially became a mirror to India’s shifting market narrative:

• Strong earnings → strong returns in 2024
• Valuation pressure + earnings slowdown → sharp deceleration in 2025
• FPIs withdrawing → sentiment hit
• Volatility staying low → stability, but not enough to fuel a rally.

Across all segments, the mood softened. And that’s what led to Nifty’s modest 5% YTD gain—marking India’s weakest showing among major global markets this year.

Summary: A Year of Caution, Reset, and Rebalancing

2025 hasn’t been about market crashes. Instead, it’s been about market cooling.

A year where:

• Valuations moderated
• Earnings dipped
• Foreign investors rotated out, then back in.
• Volatility stayed surprisingly stable.
• And all major indices—Nifty 50, Nifty 100, Nifty Midcap 150, Nifty Smallcap 250—lost the pace they enjoyed in 2024