MUMBAI: India’s equity markets are poised for a robust opening in 2026, fueled by expectations of policy continuity from the upcoming Union Budget. Analysts predict a surge in investor confidence as the government signals steady fiscal measures amid global uncertainties.
The benchmark indices, Sensex and Nifty, ended 2025 on a high note, gaining over 15% annually despite volatility from geopolitical tensions and inflation pressures. Experts attribute this resilience to strong domestic fundamentals, including robust GDP growth projections of 6.8-7% for the next fiscal year.
‘The budget will be a game-changer,’ says Rajesh Mishra, Head of Research at a leading brokerage. ‘Focus on infrastructure spending, tax reforms, and ease of doing business will provide the much-needed policy stability.’
Key sectors like banking, IT, and renewables are expected to lead the rally. With foreign institutional investors (FIIs) returning after a brief outflow, domestic mutual fund inflows have crossed ₹2 lakh crore this year, signaling deep retail participation.
However, challenges remain. Rising US bond yields and potential Fed rate hikes could pressure emerging markets. Yet, India’s improving current account deficit and controlled fiscal deficit at 4.9% of GDP offer a buffer.
As Finance Minister Nirmala Sitharaman prepares to unveil the budget, markets are betting on populist measures balanced with fiscal prudence. A strong start in January 2026 could propel the Nifty past 26,000 levels, marking a new bull phase.
Investors are advised to eye quality stocks in consumption, manufacturing, and green energy. The stage is set for India’s markets to outperform global peers, underpinned by policy stability and economic momentum.