2026 Market Outlook: Golden Tip For Equity Investors, Key Sectors To Monitor & Other Details

Against the stellar performance of several global equity markets in 2025, India's benchmark stock market indices recorded modest returns with Nifty50 surging over 10% and the Sensex closing the previous year 8.55% higher.

MD and CEO of Edelweiss Mutual Funds, Radhika Gupta, on January 2, 2026, shared the equity market outlook for 2026, pinning hopes on improvement in domestic earnings and balance sheets to driving confidence.

"India heads into 2026 stronger than most emerging markets, with improving domestic earnings and improving balance sheets driving confidence," the Edelweiss Mutual Funds equities outlook report noted.

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Earnings Growth

After an improvement in the earnings outlook by several brokerages, it said, "Early signs of an earnings upgrade cycle point to a more durable market rally beyond index highs. Large caps are trading at -20x while Mid and Small caps are trading at-24-27x translating into -37% and -22% premiums over the Nifty 50."

What Investors Should Expect From Gold & Silver In 2026?

Precious metals remain portfolio stabilizers, not return chasers. As equities regain leadership, gold and silver outperformance is likely to moderate in 2026.

What Could Uplift Early Market Sentiment In 2026?

The India-US bilateral trade deal will likely be a meaningful sentiment booster for the market with hopes set on both sides agreeing upon a “mutually-beneficial” pact. 

Market Watch: Key Sectors To Track Closely

• Financials
• Consumer Discretionary
• Defense
• IT

Key Market Triggers In 2026

The Indo-US trade deal progress and 8th Pay Commission clarity remain key market triggers, however, earnings upgrades and domestic liquidity will play a pertinent role in shaping sector leadership, as per  Edelweiss Mutual Funds report.

Biggest Risk To Equity Markets

• Economic repercussions of non-resolution of tariffs globally.

Golden Tip For investors in 2026

From medium-term perspective, we would advise investors to gradually increase their exposure to Indian equities as it offers a potential combination of reasonable valuations and start of the earings upgrade cycle.

Disclaimer: The views expressed in this article are purely informational and Republic Media Network does not vouch for, promote or endorse any opinions stated by any third party. Stock market and Mutual Fund investments are subject to market risks and readers are advised to seek expert advice before investing in stocks, derivatives and Mutual Funds.