Indian stocks experienced their worst annual underperformance in Asia in three decades during 2025, with the NSE Nifty 50 Index facing its first monthly loss since August. Despite this, the market achieved a record tenth consecutive year of gains, supported by substantial domestic institutional investment. Analysts anticipate potential outperformance in 2026 if corporate earnings grow and policy measures support domestic demand, though near-term challenges like typical January declines and strong IPO liquidity persist.