ETMarkets Smart Talk | Caution on gold, optimism on PSU banks and defence: Gaurav Bhandari’s 2026 market playbook

As markets head into 2026 amid global uncertainties, shifting capital flows and evolving domestic dynamics, investors are reassessing where the real opportunities lie.

In this edition of ETMarkets Smart Talk, Gaurav Bhandari, CEO of Monarch Networth Capital, shares his nuanced market playbook for the year ahead.

While he urges caution on the recent rally in gold and silver, which he believes has turned increasingly speculative, Bhandari remains constructive on Indian equities, particularly PSU banks and the defence sector.


He also weighs in on earnings expectations, Budget 2026 priorities, the resilience provided by SIP inflows, and the outlook for the rupee and India’s economic growth in a challenging global environment. Edited Excerpts –

Q) December Quarter Earnings – What are your expectations?
A) December quarter earnings should be decent but not spectacular. On an aggregate basis, we expect Nifty earnings growth of around 7–9% for the quarter. While certain pockets like banks and select industrials may show resilience, overall earnings growth will remain moderate.

Q) Gold and Silver were high performers – how should investors play the precious metals theme in 2026?

A) Gold and silver have increasingly become speculative assets, with price movements driven more by geopolitical tensions, central bank actions, and investor sentiment, rather than intrinsic fundamentals.

At current levels, the risk-reward does not appear very favourable. Investors should approach precious metals with caution, use them largely as a hedge or tactical allocation, and avoid aggressive positioning purely based on recent price momentum.

Q) Expectations from Budget 2026?
A) We expect a strong reform-oriented budget. In particular, the government is likely to focus on measures that improve investor sentiment, including possible taxation relief or clarity for Foreign Institutional Investors (FIIs).

With sustained FII outflows over the past 3–4 years, we believe the government will actively attempt to arrest capital flight and enhance India’s attractiveness as an investment destination.

Q) SIP inflows as a buffer against FII sell-offs – outlook for 2026?
A) Domestic SIP flows have been a key stabilising force for Indian equities, and we expect this trend to continue in 2026. Financialization of household savings, rising investor awareness, and long-term wealth creation themes should keep SIP inflows robust and consistent, providing a cushion against any intermittent foreign selling.

Q) Rupee at 90 – are we heading towards 100 per USD? Should investors worry?
A) We do not see the rupee depreciating to 100 per USD. The government and RBI are likely to take strong corrective measures, particularly to boost exports and manage currency volatility.

In fact, we expect the rupee to strengthen towards 87 levels, possibly within the next 45–60 days. While near-term volatility may persist, there is no cause for panic from an investment standpoint.

Q) Which sectors are likely to do well in 2026?
A) We continue to remain positive on PSU Banks, driven by improving balance sheets, better asset quality, and attractive valuations.

Defence is another key sector we like, supported by strong order books, indigenization, and sustained government spending. Investors can consider increasing weightage in these sectors for medium-to-long-term portfolios.

Q) India’s growth outlook amid geopolitical risks and trade wars?
A) According to our estimates, the Indian economy should grow in the range of 7.4–7.6% in the current financial year.

While geopolitical concerns and trade tensions remain headwinds, domestic consumption will continue to be the backbone of Indian growth.

India’s structural strengths, demographic advantage, and policy continuity provide confidence that growth momentum can be sustained despite global uncertainties.

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)