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Informist, Friday, Dec. 12, 2025

 

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--Mirae Asset MF: Govt spending likely to slow down in second half of 2026 
--CONTEXT: Mirae Asset MF details annual market outlook at press conference 
--Mirae Asset MF: Expect trade talks to settle down, cushion currency 2026 
--Mirae Asset MF: Inflation seen extremely stable in 2026 
--Mirae Asset MF: See monetary policy rates remaining in prolonged pause 2026 
--Mirae Asset MF: Revival of equity mkt in 2026 to be driven by earnings 
--Mirae Asset MF: Expect FIIs to come back to India in 2026 
--Mirae Asset MF: Tax relief, easing monetary policy to drive demand revival 
--Mirae Asset MF: See Nifty 50 cos' PAT growing at 10.7?GR in 2025-2027 
--Mirae Asset MF: Expectation of returns from equity should be moderate 
--Mirae Asset MF: Valuations now reasonable, avoid high-value zone 
--Mirae Asset MF: 2026 likely to be the year of mid-cap stocks

 

MUMBAI – After more than a year of muted returns, valuations of Indian equities are reasonable and market dispersion is low but expectations of returns in 2026 remain moderate, said Neelesh Surana, chief investment officer at Mirae Asset Investment Managers India. "We remain constructive as earnings growth is likely to return to a double-digit trajectory post a muted FY26, driven by improving demand, tax cuts, and monetary easing," Surana said while detailing the market outlook for 2026.

 

The revival of domestic equities next year will be driven by earnings growth, Surana said. The aggregate net profit of Nifty 50 companies is expected to rise at a compounded annual growth rate of 10.7?tween 2025 and 2027, the fund house said. The bottom line of Nifty Midcap 150 companies is expected to grow at a compounded annual growth rate of 19.8% during the same period, and the bottom line of Nifty Smallcap 250 companies is seen up at a compounded annual growth rate of 17.3%.

 

The growing presence of high-quality sector-leading companies within the mid-cap and small-cap space makes a strong case for meaningful allocation, Surana added. The fund house also said 2026 is likely to be the year of mid-cap stocks after earlier concern about a build-up of froth in the segment. More than a year ago, many experts, including the Securities and Exchange Board of India, had warned investors about frothy valuations in the mid- and small-cap space.

 

The fund house expects a prolonged pause in domestic monetary policy in 2026. The Reserve Bank of India has cut the key interest rate by 125 basis points in 2025 to 5.25%. While the apex bank said the next leg of monetary policy will be data-driven, the equity market is anticipating another reduction of 25 bps in the repo rate at the next Monetary Policy Committee meeting outcome on Feb. 6.

 

Trade talks between India and the US are expected to reach a mutually acceptable conclusion next year, the fund house said. Market participants have been expecting both countries to strike a deal for more than nine months now, but instead the US imposed a whopping 50% tariff on India in August. This has pushed foreign investors to offload domestic equities, which in turn has played a crucial role in the rupee's depreciation below the psychologically crucial 90-per-dollar mark for the first time two weeks ago. Monday, the rupee closed 0.4% lower at 90.73 against the dollar.

 

After a year of aggressive selling pressure, the fund house expects foreign investors to turn buyers of domestic equities in 2026. Foreign instituitional investors have been selling Indian stocks since October last year amid muted corporate earnings growth, rupee depreciation, slowdown in government capital expenditure, weak consumption trends, attractive valuations of markets in the US and China, high inflation, and lower-than-expected economic growth. So far in 2025, they have net offloaded almost $18-billion worth of domestic equities, up sharply from net sales of $754 million a year ago.  End

 

Reported by Anjana Therese Antony

Edited by Rajeev Pai

 

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