Mumbai, January 14 (IANS). The Indian stock market is now entering 2026 on a strong note after a year of stability, with better valuations of stocks, realistic earnings expectations and the country’s strong economic condition shaping the positive outlook, according to a report released on Wednesday.
Although global events can sometimes create uncertainty, smallcase managers say India’s macro fundamentals, i.e. the country’s economic foundation, are still strong.
He believes that this year will be better for those investors who will invest after seeing the earnings of the companies and not just on the basis of growth.
The report says that economic growth based on consumption may be seen in 2026. This will be supported by controlled inflation, tax cuts, relief in GST and reduction in interest rates, which will increase the spending power of the people and make it easier to take loans.
Sonam Srivastava, smallcase manager and founder of Wright Research, said that the market situation in 2026 is more balanced and positive than that of 2025. Stock prices are now better than ever, earnings expectations are realistic and the country is economically stable.
He further said that the benefits of investment in 2026 will be based on the earnings of the companies and not just on the rise in share prices. Therefore, it will be more important to choose shares thoughtfully.
Sneha Jain, Small Case Manager, Founder and CEO, WealthTrust Capital Services, said that after the decline in valuation in 2025, shares of large cap companies are now trading below the shares of mid cap and small cap companies.
He said that the balance sheet, cash flow and corporate governance of large cap companies are quite strong. Therefore, in the next 6 to 8 months, they may be more attractive than expected for investment, but it is important to maintain investment balance. Large caps should not be kept for high profits, but as a strong base to provide stability to the portfolio.
According to Sneha Jain, the government’s fiscal discipline policy, consistent spending on infrastructure, support to manufacturing and MSME sectors and clarity on long-term capital gains tax are more important than short-term incentives.
Meanwhile, Prachi Deuskar, manager of Smallcase and co-founder of Lotusdew Wealth and Investment Advisors, said that the upcoming Union Budget will advance policies related to infrastructure, formal economy and financial discipline, and steps can also be taken to increase financial participation of domestic investors.
He said that the MSME sector may also see some supportive measures, such as easier access to finance, credit guarantees and incentives to increase productivity and strengthen market access.
–IANS
DBP/ABM