Earnings, policy and economic health to steer markets in 2026

As India steps into 2026, the equity market finds itself at an important turning point. After a phase largely driven by strong domestic liquidity, the focus is now shifting toward earnings delivery, policy stability and the broader health of the economy.

Market experts believe this transition could define how Indian equities perform in the year ahead. The year 2025 delivered mixed results for investors. The Nifty touched a record high of 26,326 on December 1 and ended the year with gains of over 10 per cent.

The Sensex, meanwhile, rose by around 8 per cent over the past year. While these returns were positive, they came amid sharp volatility, policy uncertainty and global headwinds, making it a challenging year for market participants.

Inflation trends have played a key role in shaping market sentiment. After falling to a record low in October, inflation edged up slightly in November. However, it continues to remain well below the Reserve Bank of India’s medium-term target of 4 per cent.