Equities outlook: Report flags stable macro backdrop; warns valuations already price in optimism
Indian equities are poised for stable performance heading into 2026, driven by robust corporate balance sheets and an earnings recovery. However, after a significant market upcycle and rerating, stock valuations already reflect much of the growth optimism. Consequently, future market returns are expected to be more moderate, with selective stock picking and company-specific fundamentals likely to outperform broad macro narratives.
Indian equities are poised for stable performance heading into 2026, driven by robust corporate balance sheets and an earnings recovery. However, after a significant market upcycle and rerating, stock valuations already reflect much of the growth optimism. Consequently, future market returns are expected to be more moderate, with selective stock picking and company-specific fundamentals likely to outperform broad macro narratives.