FY26 turned out to be a year of sharp divergences across asset classes, as global uncertainty, rising yields, and geopolitical shocks -- such as the Russia-Ukraine war and the Middle East crisis toward the end of the fiscal -- disrupted traditional market linkages. U.S. tariff actions and an evolving Federal Reserve rate outlook further weighed on risk sentiment, keeping equities under pressure. In contrast, safe-haven assets, particularly bullion, delivered strong returns, signalling a clear shift in investor preferences toward safety and diversification.

The equity market was the worst performer among asset classes, amid renewed volatility driven by several factors, including trade-related disruptions, concerns over stretched valuations, muted profit growth, and geopolitical tensions. This contributed to a sharp correction in the domestic bourses, leading to a 7% decline in the benchmark equity indices.

Sensex, Nifty fall up to 7% in FY26

The BSE Sensex declined 7.1% during the financial year to settle at 71,948 as of March 31, 2026, while the NSE Nifty 50 fell 5.1% to 22,331, reflecting sustained pressure from global risk-off sentiment, rising interest rates, and geopolitical tensions.

Across sectors, losses were concentrated in FMCG, IT, and real estate stocks, while auto and metal indices outperformed.

Foreign portfolio investors (FPIs) recorded equity outflows of around ₹1.76 lakh crore ($19.3 billion) in FY26, marking one of the highest annual withdrawals since FY21, when they had pulled out ₹2.74 lakh crore ($37 billion) during the Covid-19-led crisis.

In contrast, domestic institutional investors (DIIs) infused over ₹8.3 lakh crore ($94 billion) into the equity cash market, offsetting persistent FPI selling.

Despite the correction in benchmark indices, primary market activity remained resilient. Total equity fundraising rose 5% to ₹4.47 lakh crore, indicating that companies continued to tap capital markets even amid elevated volatility.

InvITs, REITs show resilience

A notable bright spot within capital markets was the strong traction in real asset-backed instruments. Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) continued their upward trajectory through FY26, reinforcing their appeal as yield-oriented investment avenues. Overall fundraising through InvITs and REITs rose 25% to ₹30,530 crore, driven by strong investor appetite in a rising rate environment.

Within InvITs, fresh listings surged sharply to ₹7,700 crore from ₹1,578 crore, while QIPs rose 55% to ₹8,467 crore. However, this was partially offset by a decline in preferential allotments and the absence of rights issuances. On the REIT side, activity picked up with ₹4,800 crore raised through fresh listings, alongside a 53% increase in preferential allotments to ₹2,819 crore, while QIP activity remained steady.

Debt markets also remained active, with total debt mobilisation increasing 10% to ₹15.54 lakh crore, indicating continued demand for fixed-income instruments.

Overall fund mobilisation across equity and debt rose 9% to ₹20.32 lakh crore, reflecting robust capital formation despite market headwinds. However, the cost of capital moved higher during the year.

Gold leads, silver outperforms

In a world unsettled by geopolitical tensions, trade disruptions, currency volatility, and shifting monetary regimes, gold once again reaffirmed its role as a safe-haven asset. In India, gains were further amplified by rupee depreciation, enhancing returns compared to global markets.

On the Multi Commodity Exchange (MCX), gold prices rose from ₹91,316 per 10 grams at the beginning of the year to ₹1,47,450 by the end, delivering a strong 61.5% return. During the year, prices peaked at ₹1,80,779 per 10 grams in January, nearly doubling from April levels, before correcting by about 18.4% in the subsequent months.

In international markets, gold climbed from $3,124 per ounce to a peak of $5,597 in January, before easing to $4,559 by the end of the fiscal.

Silver, however, outshone all major asset classes during the year. Domestic prices surged from ₹1,00,398 per kg to a peak of ₹4,20,048 in January, marking an extraordinary 318% rally. Although prices corrected sharply by around 45% thereafter, silver still ended the year at ₹2,29,000 per kg, delivering an impressive gain of about 128%.

In global markets, silver mirrored this trajectory, rising from $34.08 per ounce to $121.67 in January before cooling to $72.77 by the end of March.

The rally was driven by a combination of factors, including relatively low real interest rates, heightened policy uncertainty, and sustained buying by global central banks. In addition, strong investment demand—particularly through gold- and silver-backed ETFs, as well as bars and coins—provided further support to prices.

Bond yields spike amid West Asia crisis

India’s bond market witnessed sharp volatility in the second half of FY26 amid global uncertainties and domestic supply concerns. The 10-year yield remained volatile through FY26, starting at around 6.40% in April 2025, moving largely range-bound in the initial months, and then inching higher in the second half. Yields rose to around 6.65% in January 2026, further to 6.70% in February, and 6.75% by March, reflecting sustained upward pressure driven by global cues, rising crude oil prices, inflation concerns, and currency weakness.

The first half of the fiscal saw a softening bias, supported by favourable inflation, an easing monetary policy cycle, and liquidity measures by the Reserve Bank of India (RBI). However, yields turned sticky later due to concerns around excess supply of government securities.

Consolidation in cryptos continues

At the opposite end of the risk spectrum were cryptocurrencies, which experienced a rollercoaster ride in FY26. True to their highly volatile nature, total crypto market capitalisation fell 13.85% to $2.3 trillion amid geopolitical pressures, ETF outflows, and macro headwinds.

Bitcoin, the largest contributor to overall market value, corrected by 19% to $66,691, reflecting volatility and profit booking. On the other hand, Ethereum, the second most valued crypto asset, managed a modest 12% gain to $2,024, supported by continued ecosystem development and institutional interest.

“On-chain data highlights continued accumulation, with whales adding over 205,000 BTC in the last week of March, signalling a potential shift in trend. Historically, Bitcoin has delivered average returns of 33.4% in April. If institutional inflows and large-holder demand sustain, BTC could recover toward the $80,000–$90,000 range in the coming weeks,” said Akshat Siddhant, Lead quant analyst, Mudrex.