The stoic Sensex won again in 2025 —a rare period of calm amid tariff, geopolitical storm

Indian equities navigated a paradoxical 2025, remaining historically stoic despite the lingering shadow of late-2024 corrections and the pressure of US tariffs. With a maximum drawdown—the peak-to-trough decline within the year—of just 9% and a year-end return of 8%, 2025 stands as a year of relative calm.This performance is not a rarity, though.

Over the last three decades, only eight years, including 2025, have seen an intra-year decline of 10% or less in the Sensex.This suggests that equity markets tend to overlook shock-inducing events, such as tariff wars or geopolitical flare-ups, unless the disruption evolves into a full-blown systemic crisis or a global pandemic.Experts see this as evidence of a structural shift, where the growing depth of domestic capital is increasingly insulating Indian markets from external volatility.India’s shallow drawdown reflects a rare balance in market microstructure, where steady domestic SIP inflows are being absorbed by fresh paper supply through IPOs, QIPs and promoter exits, preventing sharp moves in either direction, notes Harsh Gupta Madhusudan, fund manager of Ionic Asset's PIPE Fund.“With FPIs trimming secondary exposure while domestic money keeps coming in, the market has effectively been range-bound rather than fragile,” he adds.While drawdowns are a market certainty, they serve as a necessary reminder that investors must often endure mid-way pain to achieve impressive returns. According to a Mint analysis, the Sensex has seen an average intra-year decline of nearly 20% over the past 30 years.