New Delhi, Jan 2: India’s equity markets are expected to remain resilient in 2026 amid global uncertainty, supported by strong domestic fundamentals, policy support and sector-specific tailwinds, a new report has said.
The report from BP Wealth and STOXBOX forecasted that the domestic economy should continue to shine in the global context as “various India-specific triggers are aligned in the right direction”.
Autos likely to outperform
Among sectors, automobiles are expected to outperform with mid-single-digit to high-single-digit volume growth as demand benefits from easing inflation, softer interest rates and GST rationalisation, said the report.
Banking sector positioned for steady growth
The banking sector is positioned for steady, scalable growth as lenders have rebalanced portfolios towards secured retail, agriculture, and MSME (RAM) assets and gold-backed lending.
Policy support and rate cuts to aid growth
The government’s fiscal strategy is expected to focus on a sustained reduction in the debt-to-GDP ratio alongside prudent fiscal management. It added that cumulative 125 basis points rate cuts, liquidity injections and macro-prudential easing by the Reserve Bank of India provide “a strong growth runway”.
Infra-led sectors to benefit
Capital-intensive sectors such as cement and metals should gain from the government’s infrastructure spending. Total cement demand is expected to rise about 6–7 per cent and steel demand roughly by 8 per cent. Pharmaceuticals are expected to deliver 8–10 per cent revenue growth, the report noted.
Nifty target revised upward for 2026
A recent report forecasted that India’s benchmark index Nifty is set to touch 29,150, up from an earlier expectation of 28,500 by December 2026, implying a return of 12 per cent year-on-year for calendar year 2026.
Earnings recovery expected
Benign inflation and an improving demand environment, aided by fiscal and monetary measures, will drive a turnaround in the domestic earnings cycle, it predicted.
Key risks flagged
The brokerage, however, flagged high valuations, foreign institutional investor outflows and elevated US inflation and interest-rate trajectories as key challenges.
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Markets hit record highs
Indian equity markets touched record highs on Friday, led by strong buying in metal, FMCG and auto stocks. The Sensex gained 0.67 per cent to settle at 85,762, while the Nifty advanced 0.70 per cent to close at 26,328.
(Disclaimer: Except for the headline, this article has not been edited by FPJ's editorial team and is auto-generated from an agency feed.)
