New Delhi, Dec 30 || Indian equity markets are expected to be on “firmer footing” in 2026, with domestic demand strongly supported by "macro front, lower inflation, healthy post-monsoon harvests, and the wealth effect of gold," a report said on Tuesday.
The report from Bajaj Finserv Asset Management Limited said corporate earnings should improve on government tax measures and RBI monetary easing, pointing to a broad‑based cyclical recovery.
The asset management firm forecasted sectoral leadership to be driven by domestic cyclicals and consumption, while exports could gain momentum as tariff-related uncertainties ease and the rupee stabilises.
CY25 was marked by heightened volatility from shifting trade tariffs, geopolitical tensions, and persistent foreign institutional investor outflows, yet markets showed resilience underpinned by strong domestic fundamentals and a shift in investor dynamics, the report said.
Large‑cap stocks provided relative stability while mid‑caps returned around 5 per cent. In comparison, small‑caps fell approximately 8 per cent, reflecting a flight to quality as investors favoured balance sheet strength and earnings visibility.