FX.co ★ Sensex Poised for 8.7% Gain in 2025

The BSE Sensex climbed 242 points, or 0.3%, reaching 84,917 during morning trade on the final trading day of 2025. This increase halted a five-session losing streak, primarily driven by robust performance in metal stocks following the government's implementation of a three-year import tariff on select steel products. The metal sector gained 1.2%, with notable contributions from JSW Steel (4.0%), Jindal Steel (3.3%), and Tata Steel (2.0%). Despite this uptick, gains were limited by continued foreign outflows, with international investors divesting shares to the tune of a record $18.5 billion throughout the year. The Indian stock market is poised to decline by approximately 0.9% for the month amidst these persistent foreign outflows. Nevertheless, the index marked a significant rise of approximately 8.7% over the year, bolstered by strong domestic economic data. Concurrently, a deceleration in annual inflation has raised hopes for the Reserve Bank of India (RBI) to lower its benchmark policy repo rate in 2026 to stimulate GDP growth in the face of uncertainty surrounding the US-India trade agreement. Moreover, interest rate cuts by the Federal Reserve and anticipations of further monetary easing next year have also contributed to positive market sentiment.