“Uncertainty is the only certainty that we will have in 2026,” he said, adding that the direct impact on India is limited, except for the possible recovery of some stuck funds for Oil and Natural Gas Corporation (ONGC). He noted that softer crude prices could help India if the trend sustains.
Earnings recovery to support markets
On market returns for 2026, Pankaj Tibrewal, Founder & CIO, IKIGAI Asset Manager said he expects earnings growth to improve from the fiscal year 2026-27 (FY27), supported by banking, auto and other sectors. “Our sense is that market finally should track the earnings momentum,” he said, adding that earnings growth could be in the range of 12–30% in 2026-27.
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He also said foreign investor flows could return after several years of weakness. According to Tibrewal, India being “out of favour” with global investors could turn into a contrarian signal if global risks rise.
Metals and commodities to remain in focus
Tibrewal reiterated his positive view on metals, saying a broader commodity cycle is unfolding due to supply concentration and geopolitics. “Metals should be one sector which should be part of the portfolio,” he said, adding that the trend has already been visible in gold and silver and is now spreading to other commodities.
Both experts said copper and aluminium could remain key commodity themes in 2026, alongside other bulk commodities over time.
Mid and small caps preferred; bottom-up approach advised
On market segments, Tibrewal said his preference is for a mix of mid and small caps, driven by stock-specific opportunities rather than broad rallies. Agarwal agreed, saying his focus remains on bottom-up stock selection.
Tibrewal cautioned that 2026 is unlikely to see a broad-based rally similar to the post-pandemic period. “It will be a bottom-up stock pickers market,” he said, urging investors to focus on balance sheets and cash flows.
Key drivers to watch in 2026
Agarwal said nominal gross domestic product (GDP) growth, inflation trends and stability in the dollar-rupee exchange rate will be important drivers for Indian markets. Tibrewal added that earnings recovery will remain the main trigger for renewed market momentum.
On the India-US trade deal, Agarwal said there is no clarity on timelines but hopes it could be concluded within three months.
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On the Union Budget, Pankaj Tibrewal said he does not expect any negative surprises, noting that the government’s recent approach has been supportive of domestic investors. He said market feedback has been clear on the need to back local participation, and the Budget is likely to remain constructive.
Ashwini Agarwal said he is looking for stronger signals on privatisation, which could free up resources for infrastructure spending. He added that government spending has tilted more towards consumption in recent years, and privatisation could help shift the focus back towards investment-led growth.
For the full interview, watch the accompanying video
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