Market Guru Year-End Special: Closing 2025, Eye On 2026

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.