Will markets bounce back or gold continue its run? 7 experts reveal what investors can expect from year 2026

Indian equities had a sobering year in 2025. Markets corrected, foreign investors pulled out, and earnings growth was muted. Small-caps took a beating, precious metals ruled. As we head into 2026, big questions loom: Will markets bounce back or continue to correct? Which sectors will lead? Can gold sustain its stellar run? Will interest rates fall more? ET Wealth asked seven market experts what investors should expect from the year ahead.

Lakshmi Iyer
Group President, Investments, Bajaj Finserv


Q.Will markets correct or rally further in 2026?
MARKETS will do “Bhag Milkha bhag”, albeit at a slower pace, more of a marathon than a sprint.
Q.Best investment theme/sector for next year?
RISK hai toh Ishq hai — sentiment to favour risk asset classes in 2026.
Q.Most overrated investment theme currently?
HUMAN intelligence is becoming increasingly lopsided towards AI!
Q.Will gold continue to shine next year?
SHINE it will, though sheen could be less than in 2025.
Q.Which asset class will outperform in 2026?
EQUITIES. Fixed income and equities could see some convergence in returns.
Q.Will interest rates fall further, pause or go up?
SCOPE for some downward movement.
Q.Will US markets outperform or underperform India?
GROWTH and inflation metrics favour India, given the underperformance in 2025.
Q.China: Avoid or opportunistic buy?
OPPORTUNISTIC buy – China valuations relative to most countries still look good.

Raamdeo Agrawal
Chairman & Co-founder of Motilal Oswal Financial Services

Q.Will markets correct or rally further in 2026?
RALLY. 2025 was subdued, so next year should be better, led by earnings pickup, business optimism.
Q.Best investment theme/sector for next year?
FINANCIALS, led by lenders, particularly NBFCs. Auto sector will also do well.
Q.Most overrated investment theme currently?
ANY pockets where PE multiple is exorbitant but growth is muted.
Q.Will gold continue to shine next year?
CANNOT say, I have been proven wrong on gold before.
Q.Which asset class will outperform in 2026?
EQUITIES. When things look dull, is when equities do well.
Q.Will interest rates fall further, pause or go up?
DIRECTIONALLY lower—real interest rate is very high.
Q.Will US markets outperform or underperform India?
GLOBAL markets will do well.
Q.China: Avoid or opportunistic buy?
CANNOT say.

Prashant Khemka,
Founder, WhiteOak Capital Management

Q.Will markets correct or rally further in 2026?
RALLY 10-12%
Q.Best investment theme/sector for next year?
STOCK-specific opportunities across the board.
Q.Most overrated investment theme currently?
NONE. Last year’s themes, like Railways and Renewables, have substantially corrected through 2025.
Q.Will gold continue to shine next year?
NOBODY has a logical clue.
Q.Which asset class will outperform in 2026?
MY CHOICE is equities every year.
Q.Will interest rates fall further, pause or go up?
FALL further.
Q.Will US markets outperform or underperform India?
THEY will perform similarly.
Q.China: Avoid or opportunistic buy?
MANY stock-specific opportunities to invest.

Shreyas Devalkar
Head of Equity, Axis MF

Q. Will markets correct or rally further in 2026?
RALLY, but moderate. Valuations easing, growth narrative constructive.
Q. Best investment theme/sector for next year?
CONSUMPTION themes. Retail, Hospitality, Travel. Also Autos, Renewables, Defence.
Q. Most overrated investment theme currently?
NONE in particular.
Q. Will gold continue to shine next year?
SAFE haven flows support near-term gains, but volatility likely through 2026.
Q. Which asset class will outperform in 2026?
INDIAN equities, steady gains likely, driven by earnings revival.
Q. Will interest rates fall further, pause or go up?
FALL further—lower rate environment ahead.
Q. Will US markets outperform or underperform India?
INDIA outperforms. US AI investments face return on capital concerns.
Q. China: Avoid or opportunistic buy?
OPPORTUNISTIC. Easing geopolitical tensions and reforms offer selective opportunities.

Shyam Sekhar
Founder and CIO, ithought PMS

Q.Will markets correct or rally further in 2026?
THE market could see a correction in 2026, and flows will be very critical.
Q.Best investment theme/sector for next year?
CONSUMPTION.
Q.Most overrated investment theme currently?
EMS (Electronics Manufacturing Services).
Q.Will gold continue to shine next year?
DOUBTFUL if it will.
Q.Which asset class will outperform in 2026?
EQUITY still looks better than the rest.
Q.Will interest rates fall further, pause or go up?
INTEREST rates are unlikely to go up.
Q.Will US markets outperform or underperform India?
THE two markets will be coupled in 2026.
Q.China: Avoid or opportunistic buy?
OPPORTUNISTIC. Buy with limited exposure.

Vikas Gupta
CEO and Chief Investment Strategist, OmniScience Capital

Q.Will markets correct or rally further in 2026?
RALLY—Earnings growth + interest rate cuts + policy triggers.
Q.Best investment theme/sector for next year?
PSU banks. Double digit growth rates available at PE <10.
Q.Most overrated investment theme currently?
DOMESTIC consumption via FMCG and Consumer Durables.
Q.Will gold continue to shine next year?
LESS likely, with a ~80% rally this year, it is unlikely to continue.
Q.Which asset class will outperform in 2026?
EQUITIES—11-12% earnings growth, rate cuts support, mid-teens growth ahead.
Q.Will interest rates fall further, pause or go up?
FALL further. Inflation below RBI target gives huge room for cuts.
Q.Will US markets outperform or underperform India?
UNDERPERFORM: Magnificent 7 dominated, over-appreciated, likely taking a breather.
Q.China: Avoid or opportunistic buy?
AVOID. Unpredictable regulations, weak governance, and low capital efficiency pose country risk.

Sachin Bajaj
Executive Vice President and CIO, Axis Max Life Insurance

Q.Will markets correct or rally further in 2026?
RALLY. Robust macro backdrop and accelerating corporate earnings drive optimism.
Q.Best investment theme/sector for next year?
CONSUMPTION, Financials, Healthcare, Consumer discretionary; upside in select manufacturing.
Q.Most overrated investment theme currently?
SEVERAL segments overvalued. Rigorous scrutiny needed before investing.
Q.Will gold continue to shine next year?
WE expect gold to stabilise in 2026.
Q.Which asset class will outperform in 2026?
EQUITIES—driven by robust macro fundamentals and accelerating earnings growth.
Q.Will interest rates fall further, pause or go up?
WITH inflation softening, we anticipate a 25-basis-point repo rate cut.
Q.Will US markets outperform or underperform India?
INDIA outperforms. Robust domestic earnings growth and superior value creation.
Q.China: Avoid or opportunistic buy?
CAUTIOUS. Softening real estate, retail, geopolitical friction, deflationary pressures.