Even with global uncertainty, a senior fund manager believes India’s equity market will keep moving upward through 2026, offering steady opportunities for everyday investors.
Overall Market Outlook
Rajat Chandak, a senior fund manager at ICICI Prudential, says the Indian market’s basic strengths remain solid. Domestic consumption, government spending on infrastructure, and healthier balance sheets of private companies all act as a cushion against external shocks.
How to Think About Asset Allocation
Chandak advises not to chase last year’s winners. Instead, focus on long‑term goals. He says equities are still the best tool for building wealth over time, even when gold performed well in the short run.
Suggested Investment Strategy
Valuations are not cheap across the board, but mid‑ and small‑cap stocks offer relatively attractive entry points. The most practical way to capture this upside is through diversified equity funds that can shift across market caps.
- Flexi‑cap funds – can move between large, mid and small caps as conditions change.
- Hybrid funds – blend equities with debt for more conservative investors or lump‑sum investors.
Sectors Likely to Perform Well
- Large banks – reasonable valuations and improving growth outlook.
- Automotive – expected rise in discretionary spending could boost sales.
- Internet platforms – continue delivering steady growth.
- Life insurance – India’s low penetration means strong long‑term potential.
- IT services – valuations already reflect near‑term uncertainties, limiting downside risk.
Value vs. Growth and the Role of Flexi‑Cap Funds
Rather than picking only value or only growth stocks, Chandak suggests a blended approach that selects companies with reasonable prices relative to their future earnings. Flexi‑cap funds give managers the agility to balance the stability of large caps with the growth potential of smaller companies.
Key Takeaways for Retail Investors
- Stay invested in equities for long‑term wealth creation.
- Consider diversified or flexi‑cap funds to navigate volatility.
- Focus on sectors with strong domestic drivers like banks, autos, digital platforms, life insurers, and IT.
- Keep a balanced portfolio across asset classes, especially if you prefer a more conservative stance.
Remember, this is perspective, not a prediction. Do your own research and consider consulting a certified financial advisor before making any investment decisions.