Ahead of the Union Budget, Market Guru brings you an in-depth conversation on how investors should position themselves in a volatile and opportunity-rich market environment. Moderated by Sakshi Batra and Shailender Bhatnagar of Business Today, this pre-Budget special features Jyotivardhan Jaipuria, Founder & Managing Director of Valentis Advisors, as he shares his expert perspective on market trends, sectoral opportunities and key risks to watch. From identifying potential pre-Budget investment themes to understanding how policy signals could influence equities, interest rates and investor sentiment, this discussion offers practical insights for both retail and long-term investors. As expectations build around growth, fiscal discipline and reforms, the Market Guru decodes what really matters for your portfolio in the run-up to the Budget and beyond.
Market Guru Yogesh Patil, CIO-Equity at LIC Mutual Fund, shares his outlook for calendar year 2026, Q3 earnings expectations, sectoral trends, and asset allocation strategies. Patil highlights improving credit growth, potential interest rate cuts, normalization in Q3 earnings, and selective opportunities across BFSI, specialty chemicals, defence, and capex-led sectors. He also discusses the structural bull case for gold and silver amid global uncertainty and central bank buying. While challenges remain, Patil believes the next 15 months could be better than the previous phase, supported by policy reforms, easing liquidity, and improving economic momentum.
As markets take a breather in early January, all eyes turn to the Union Budget and what it may mean for equities. Market Guru Satish Ramanathan believes the Finance Minister faces a classic tightrope walk — balancing fiscal discipline with the need to sustain economic growth. With multiple demands on the tax rupee, from subsidies to social spending, the biggest hope from Dalal Street is stability. Investors want a predictable tax regime and a budget that remains expansionary rather than contraction-led. As pre-budget rally expectations stay muted, clarity on taxation, spending priorities and growth support could decide the next market move. For equities, stability may be the strongest stimulus of all.
Indian markets opened 2026 with early highs but quickly faced heavy selling pressure, with Nifty down ~200 points and Bank Nifty/IT indices sharply lower amid geopolitical tensions in Europe and South America, weekly expiry dynamics, and pre-weekend caution. JM Financial AMC CIO Satish Ramanathan views the volatility as an opportunity, noting reasonable economic momentum and improving earnings, though valuations warranted a pullback. He expects Q3 earnings to be solid and anticipates a post-Budget rally driven by domestic consumption push, possible tax reforms, and measures to attract FIIs. Precious metals continue strong on safe-haven demand. Strategy: Gradually build portfolios in volatile markets; avoid panic selling. Markets defend 25,900 on Nifty; IT down 2%.
In a volatile, range-bound 2025 marked by elevated valuations, earnings slowdown, global trade resets, FII outflows, and rupee depreciation, the Nifty delivered ~9-10% returns (largely matching inflation), while mid/small-caps underperformed significantly. Kotak AMC CIO Harsha Upadhyaya views 2026 more positively, with negatives resolving, earnings rebounding to low double-digits in H2 FY26 and mid-teens in FY27. Large-cap valuations near long-term averages support better performance. Retail investors' faith in SIPs/mutual funds persisted amid direct equity pain. Banking/financial services remain favored for credit growth and stable asset quality. IT stays modest with limited upside; precious metals positive but volatile post-strong run. Defense selective; speciality chemicals/metals improving on supply constraints. Overall, expect steadier gains in 2026.
Small-cap stocks have been among the worst performers in 2025, falling nearly 20–23%, even as headline indices hover near record highs. This sharp correction has left many retail portfolios under pressure. Market experts stress that this is not unusual for the small-cap space, which is inherently volatile. Historical data shows that small-cap indices frequently decline 20–25% from their peaks and can take several years to recover. While the segment offers strong alpha-generation potential for skilled fund managers with deep research capabilities, it may not suit investors seeking stability. Due to its high volatility, small caps require patience, discipline and proper asset allocation. Investors are advised to avoid timing cycles and understand that short-term pain is often part of long-term small-cap investing.
The IPO market emerged as one of the biggest investor frenzies in 2025, with record fund-raising of nearly ₹1.75 lakh crore, a surge in OFS-led issues and multiple startup listings. While expectations remain strong for continued IPO activity, nearly half of the year’s IPOs are now trading below their issue prices, raising concerns for investors. Market experts caution against generalising IPO outcomes, noting that broader market weakness has also pushed many listed stocks into negative territory. A selective, bottom-up approach is key—evaluating each IPO on its own fundamentals, valuation and business quality. As India’s economy expands, listings across sectors like chemicals, healthcare and financial services are widening the investable universe, offering long-term opportunities for discerning investors.
2025 proved a challenging yet resilient year for Indian investors, marked by sharp asset class divergences, prolonged flatlining in equities, and the need for discipline amid volatility. The Nifty delivered modest ~9–10% gains despite zero corporate earnings growth for much of the year, tight monetary policy post-elections, and record FII outflows. Smallcaps suffered their worst performance since 2018, down ~20–23%, while broader markets consolidated. Gold and silver stole the show, with gold up ~75–85% and silver soaring ~100–182%—far outpacing equities and highlighting the pitfalls of chasing past winners. Record IPO fundraising hit ₹1.75–1.76 lakh crore through 103 mainboard listings, but nearly 50% traded below issue prices by year-end, underscoring valuation risks. Aashish Somaiyaa of White Oak Capital AMC views the flat period as "not bad" given headwinds—it made markets ~12–15% cheaper automatically. For 2026, he advises against chasing precious metals' past rallies; instead, favor long-term equity via diversified or asset-allocated portfolios, selective smallcap exposure through flexi/multi-cap funds, and incremental bets on underperformers like private banks, IT, and healthcare. Avoid dramatic rejigs after losses—rebalance gradually, stay invested in quality, and prepare for potential second-half recovery as valuations ease and global uncertainties fade.
As investors debate whether fresh market highs can be revisited in 2026, the focus is shifting away from traditional large-, mid- or small-cap labels. Recent earnings trends show stronger, broader growth in select mid-cap pockets, while small-cap performance remains narrow and stock-specific. The real opportunity, however, lies in identifying structural growth spaces such as healthcare, EVs and renewables, where most leaders are still outside the large-cap universe. With interest rates easing, cost of capital declining and global liquidity expected to improve, growth-oriented sectors could see renewed traction. The key, however, is selectivity - avoiding businesses past their prime and backing category leaders with sustained earnings visibility. Over time, markets follow earnings, and spotting the right growth leaders early could be the defining strategy for 2026.
After one of the most challenging 12-15 months for equity investors, markets enter 2026 with a very different setup. Valuations, once the biggest concern, have corrected sharply as earnings moved up but prices failed to keep pace. India is no longer the most expensive market, while policy tailwinds - tax cuts, repo rate reductions, GST rationalization and easing global liquidity - are now in place. Lower oil prices and rate cuts by global central banks further strengthen the macro backdrop. However, persistent selling pressure, rupee volatility and heavy IPO activity have capped upside momentum. The key question now is whether markets can absorb past excesses and transition into a more stable phase. With fundraising peaking and liquidity conditions improving, 2026 could mark a shift from pain to potential.
In an interview on Business Today Television, Prateek Agarwal, MD & CEO of Motilal Oswal Asset Management, shared an optimistic outlook for Indian equities in 2026 after a challenging 2025 marked by valuation corrections and pain in mid/small caps. He highlighted positives like significant valuation resets (India no longer the most expensive market), tax/GST/rate cuts, global easing, lower oil prices, and rupee depreciation boosting margins. Agarwal expects improved broad-market performance as rupee stabilizes, with tailwinds for growth themes like EVs, renewables, electronics manufacturing, and luxury. He advises focusing on high-growth leaders rather than cap categories, anticipates broader participation (e.g., metals, banks/NBFCs), and sees higher probability of positive outcomes. On gold/silver's strong 2025 run, he views gold as a store of value amid uncertainty and silver as industrial-driven, expecting possible consolidation before further gains.
On Business Today Television, George Thomas (Quantum AMC) discussed India's challenging 2025 equities market—characterized by weak earnings, demand slowdown, FII outflows, rupee at record lows (~90.5-91/USD), and momentum shifting to precious metals like silver (surpassing ₹2 lakh/kg amid historic rally).Despite government measures (tax cuts, 125bps rate reductions), markets slid slowly. He anticipates 2026 improvement: earnings rebound from low base, private capex revival, favorable valuations attracting flows. Optimistic on financials (banks/insurance tailwinds), IT (tech refresh).Advise continuing SIPs in valuation-conscious funds; selective in small/mid-caps. Prefer gold (20% allocation diversifier) over silver (industrial risks, tactical only).Rates likely stable medium-term; strong two-year Nifty upside. Quantum Value and Small Cap funds poised for best returns.
On December 19, 2025, amid a market rebound with Nifty reclaiming 25,900, ASK Investment Managers' Deputy CIO Sandeep Bansal shared a hopeful 2026 outlook after a painful 2025. He expects earnings growth recovery, improved sentiments from potential US trade deals/bilateral agreements, and rising government/private CAPEX benefiting from rate cuts. Fresh deployments focus on domestic cyclical plays - BFSI (credit growth, asset quality, valuations), discretionary consumption, manufacturing/capital goods. Tactically bullish on IT due to weak rupee boosting exports, attractive valuations, and improving demand. Prefers large-caps for better risk-adjusted returns; selective mid/small-cap opportunities. Advises cleaning weak portfolios, expects FII return. Long-term India story intact at ~21x forward earnings.
In a year-end market discussion, Jyoti Varadhan Jayapuriya, founder of Valentis Advisors, expresses cautious optimism for Indian equities in 2026 after a painful 2025 dominated by large-cap outperformance and sharp mid/small-cap underperformance. He anticipates better days for mid and small caps, driven by reduced valuations, diminished euphoria, and an expected earnings recovery with double-digit growth benefiting smaller companies more. Fresh deployments will focus on undervalued, underowned sectors, adding to banking on weakness, entering cement post-poor December numbers, and selectively buying chemicals impacted by US tariffs. Valentis remains underweight on IT due to long-term growth concerns from AI disruption and consumer staples owing to high valuations. Jayapuriya sees improved FII flows ahead as India's relative valuations normalize, with the base case pointing to a better, broader market in 2026.
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