Will India Surpass Global Markets in 2026?
Click to start listening
Synopsis
As we usher in 2026, the outlook for Indian markets takes a positive turn. With robust macroeconomic fundamentals and a potential shift in investor focus, S Naren forecasts that India could outperform global markets. Discover why now may be the time to adjust your investment strategies.
Key Takeaways
- Indian markets may outperform global counterparts in 2026.
- Robust economic fundamentals persist despite past challenges.
- Investors advised to focus on asset allocation.
- Precious metals show signs of inflated valuations.
- Balanced investment strategies are essential moving forward.
Mumbai, Jan 4 (NationPress) In his annual forecast for the upcoming year, S Naren, Executive Director and Chief Investment Officer at ICICI Prudential Mutual Fund, noted that 2025 became a “year of hibernation” for Indian markets, despite the nation’s robust macroeconomic fundamentals.
“India has maintained low fiscal and current account deficits, effectively controlled inflation, and exhibited healthy economic growth,” Naren asserted.
Nevertheless, Indian equities struggled to generate substantial returns, and the rupee lagged behind most global currencies, including the US dollar.
Looking towards 2026, Naren is optimistic, stating that Indian markets are poised to outperform many global counterparts in the forthcoming year.
“India continues to present one of the most compelling growth narratives over the next decade, bolstered by favorable demographics and enduring economic potential,” he added.
Naren recommended that investors prioritize sound asset allocation over pursuing short-term gains.
He proposed that portfolios could increase their equity allocation compared to early 2025, given that Indian markets have not performed as well as numerous global markets over the past year.
This situation presents a chance for investors willing to embrace calculated risks.
Simultaneously, Naren warned against raising exposure to precious metals. He pointed out that gold and silver have excelled as asset classes over the past year and over longer stretches, resulting in inflated valuations.
Silver prices have more than doubled in the past year, while gold has surged over 70 percent, significantly outpacing equity indices that yielded returns of about 10 percent.
Naren also emphasized the persistent global risks. He cautioned that many international markets seem overvalued, particularly US technology stocks, and that precious metals exhibit signs of excessive optimism.
In such a climate, he underscored the importance of a balanced and prudent investment strategy that merges growth prospects with risk management as the markets transition into 2026.
Point of View
The insights shared by S Naren highlight the dynamic nature of the Indian market. While 2025 may have been challenging, the focus on sound investments and risk management as we approach 2026 is crucial. The macroeconomic stability of India presents a compelling case for investors, emphasizing the need to adapt strategies in a global context.
NationPress
09/01/2026
Frequently Asked Questions
What were the economic conditions in India during 2025?
In 2025, India maintained strong macroeconomic fundamentals, including low fiscal and current account deficits, controlled inflation, and healthy economic growth.
Why did Indian equities underperform in 2025?
Despite positive economic indicators, Indian equities failed to deliver strong returns, and the rupee lagged against several global currencies.
What is S Naren's outlook for 2026?
S Naren believes that Indian markets are well-positioned to outperform most global markets in 2026, supported by favorable demographics and economic potential.
What investment strategy does S Naren recommend?
Naren advises focusing on proper asset allocation rather than chasing short-term returns, suggesting a slight increase in equity allocation.
Should investors be cautious about precious metals?
Yes, Naren cautions against increasing exposure to precious metals, noting that inflated valuations may pose risks for investors.
