India Poised to Outperform Global Peers Despite Near-Term Market Volatility

The wealth management firm, PL Wealth preferred the financial sector as the core portfolio anchor as credit growth is expected to stay healthy, asset quality stable and capital adequacy strong.

"Select private banks, PSU banks, and well-managed NBFCs offer attractive risk-reward, particularly during market corrections," the report said.

Industrials and capital goods are also well positioned, supported by sustained government capex, infrastructure spending, and rising order books across defence manufacturing, power equipment, and infrastructure ancillaries, the firm added.

Indian equity markets are expected to stay range‑bound in the near term, with January 2026 characterised by selective opportunities rather than broad rallies, the firm forecasted. Valuations across large caps and quality mid caps have normalised following last year's consolidation, shifting focus to earnings delivery.

Large‑cap stocks with strong balance sheets and predictable cash flows should offer relative stability, while stock‑specific opportunities may emerge in select mid‑cap names as earnings visibility improves.

"India enters 2026 with a rare combination of strong growth, low inflation, and improving corporate fundamentals," said Inderbir Singh Jolly, CEO, PL Wealth Management.

Urban consumption remains steady, while rural demand is likely to improve on the back of stable inflation, income growth, and a normal monsoon, it predicted.

Autos, consumer durables, and discretionary consumption show early signs of demand recovery, though stock selection remains critical.

Telecom continues to benefit from stable cash flows and structural growth driven by rising data consumption, it said.

The report highlighted India's stronger macro footing versus many major economies. India's FY26 GDP growth is seen at 6.5-6.8 per cent, inflation has moderated sharply, and the RBI's policy stance has become more growth‑supportive after cumulative rate cuts and liquidity measures.

However, inflation in the US though it eased around 3 per cent, it remains sticky above target, keeping markets focused on the timing and pace of rate cuts, the firm said.

GDP growth of Europe is forecasted at approximately 1-1.2 per cent, weighed down by structural challenges and weak external demand, while China's growth is expected to slow to around 4.7-4.8 per cent in 2025.

- IANS