Indian equity markets have staged a strong turnaround and are positioned for an exciting phase ahead, with 2026 expected to deliver robust returns, according to leading global market strategist Ridham Desai.
Benchmark indices have already delivered solid gains in 2025, with the Nifty 50 and Sensex rising around 10% and 9% respectively and touching fresh record highs. This marks a recovery after one of India&rsquo;s weakest relative years in more than two decades when measured in dollar terms.
India&rsquo;s recent resurgence has been driven by a clear policy shift. A series of interest rate cuts, combined with phased reductions in the cash reserve ratio and ample liquidity support, has eased financial conditions. Regulatory relief for banks has further strengthened the lending environment and improved confidence across sectors.
While global markets have enjoyed an extended bull run, India had lagged for much of the period. That trend has now reversed, with relative performance improving since late 2025. The revival is being supported by improving credit growth, especially in consumer lending, and stronger domestic demand.
Despite concerns around currency weakness and potential foreign outflows, confidence in India&rsquo;s growth outlook remains intact. With nominal growth expected to move into double digits in 2026, corporate earnings are likely to see a sharp recovery, potentially placing India among the fastest-growing markets globally.
Valuations have also become more attractive on a relative basis. At the same time, the drag from global technology and artificial intelligence-related trades appears to be easing, improving conditions for broader market participation.
Globally, unprecedented levels of fiscal and monetary stimulus in major economies are expected to limit downside risks to growth, even as trade tensions persist. However, a sharper-than-expected global slowdown or geopolitical shock remains the key external risk for India.
On the domestic front, a steady pipeline of initial public offerings is seen as healthy for the market. Continued capital raising is critical for sustaining the investment cycle, which remains at an early and productive stage.
Looking ahead, consumer-facing businesses, credit-driven sectors, energy infrastructure, banking and information technology services are expected to remain in focus. Manufacturing opportunities in areas such as defence, electronics, semiconductors and shipbuilding add to the long-term structural story. For investors, a patient, long-term approach centred on steady compounding remains the preferred strategy.

2026 Set to Be a Big Year for Indian Stocks

Markets have turned, growth is reviving, and Indian equities could see strong gains ahead

2026 Set to Be a Big Year for Indian Stocks

Markets have turned, growth is reviving, and Indian equities could see strong gains ahead

December 4, 2025 | 19:10 IST