New Delhi [India], January 4: Indian equity markets are expected to strengthen in 2026, supported by a recovery in corporate earnings, improving macroeconomic conditions, and a potential return of foreign investor flows, according to the India Equity Strategy 2026: Earnings Redux report by Antique Stock Broking Limited.
After a challenging 2025 marked by earnings downgrades and foreign portfolio investor (FPI) outflows, the outlook for 2026 appears more constructive. Antique anticipates India’s “Goldilocks” phase—characterized by robust growth, moderate inflation, and supportive policy—to continue, aided by measures from the government and the Reserve Bank of India. The expected finalisation of bilateral trade agreements with the US and the European Union is also seen as a positive catalyst.
The report projects Nifty earnings per share (EPS) to grow at a compound annual growth rate of 16 per cent over FY26-FY28, a significant improvement from subdued earnings growth in the preceding period. Corporate earnings are expected to track normalising wholesale price inflation and nominal GDP growth, creating a supportive environment for profitability across sectors.
Sectorally, a revival in private capital expenditure is anticipated to be a key investment theme in 2026. Financials, including banks, asset management firms, and insurance companies, are likely to benefit from the earnings upcycle supported by domestic macro stability. Select discretionary consumption segments and chosen mid- and small-cap stocks are also expected to attract investor interest.
The report forecasts a revival in FPI equity inflows, aided by reasonable valuations relative to other markets. Combined with steady domestic inflows, these factors could underpin an earnings-led recovery in Indian equities, following the volatility seen in 2025. Antique notes that while Indian equities remain in a mature bull market with overall indices near 52-week highs, sharp sectoral divergences persist. (ANI)
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