Nifty 2026 Setup: Risk Lies in Positioning, Not Volatility

As 2025 wraps, it’s time to reflect on the year that was, assess the key trends and strategize for the year ahead. From gold and silver shining bright to a bumpy ride for equities, this year kept investors on their toes.

Global markets partied hard, while India's stayed wobbly—yet ended on a high note. Let's break it down.

Global Markets: AI Hype Fuels Epic Gains

World stocks surfed the AI hype wave to their strongest annual gains in six years. South Korea's Kospi skyrocketed nearly 76%, Japan's Nikkei soared over 25% and Hong Kong's Hang Seng climbed more than 30%. Even China's Shanghai Composite posted over 16% gains.

Over in the West, Wall Street bagged double-digit wins too—tech-heavy Nasdaq up 21%, S&P 500 rising 17.5% and Dow Jones advancing over 14%. Talk about a global bull bash!

Nifty’s Ride: Bumpy Yet Triumphant

Indian equity markets dished out a bumpy ride in 2025, with plenty of plot twists from tariffs to GST reforms and rate cuts. The Nifty 50 started at 23,743 on January 1 and wrapped up at 26,130 by December 31, netting a ~10% return, marking the tenth straight year of gains.

Doesn't feel like it though, right? Narrow rangebound trading and broad market underperformance made it feel more like a squeeze than a sprint.

Still, some Nifty 50 stars stole the spotlight:

• Top Gainers: 3 stocks up over 50%, 8 over 30%.
• Standouts: Shriram Finance, Maruti Suzuki, Eicher Motors, Hindalco, SBI Life, Bajaj Finance.

For a point-by-point breakdown of Nifty's journey, check our deep dive: Nifty’s Journey in 2025.

Sector-wise Trends in India

Performance across sectors was clearly uneven in 2025.

• PSU Banks, Metals and Auto stocks were the star performers, with sectoral indices rising between 23% and 30%.
• On the other hand, Media, Realty and IT stocks struggled, declining between 12% and 20%.

2026 Outlook: Steady Setup for a Comeback

Early signs point towards stabilization. Buying interest is gradually improving, market breadth is showing signs of life and all eyes are now on Q3FY26 earnings in January. Corporate results will be make-or-break, but we're entering 2026 on strong footing.

Monetary and fiscal policies are aligned, consumption visibility is improving and external balances remain stable. Some of the key structural positives include strong macro stability and ongoing fiscal consolidation, healthy corporate and banking balance sheets and a sustainable long-term growth outlook.

Real GDP growth is expected to hover around 6.5% while nominal GDP could grow at about 10 to 11%.

Key Macro Triggers to Monitor

Despite the positives, 2026 will not be without its challenges. Investors should keep a close watch on US–India trade negotiations and tariff clarity, major trade deals such as the EU free trade agreement, global interest rate trajectories, evolving geopolitical developments and the sustainability of the current consumption and credit growth cycle.

Nifty Target for 2026

Predicting targets? Futile with macros and geopolitics flipping faster than a coin toss—2025 was full of surprises, and 2026 might not be any different. That said, for perspective, some market experts are pencilling in Nifty levels around 28,500 to 29,800, with the Sensex seen near 98,000.

Indian equities had a strong run between 2022 and 2025, so the relatively muted performance in 2025 looks more like a breather than a trend reversal. Historically, sharp rallies are often followed by a year or two of consolidation. This phase helps the market cool off, reset expectations and build a healthier base for the next leg of growth.

From that perspective, the current phase looks constructive. Indian equities remain well positioned to recover from the underperformance seen in 2025, supported by improving earnings visibility and strong domestic macro conditions.

Investor Tip: Focus on Asset Allocation, Not Predictions

In an environment filled with uncertainty, the real focus for investors should be on balancing risk and return. Getting asset allocation right matters far more than chasing short-term targets.

If you want to understand how to position your portfolio for the year ahead, do check out our detailed guide on why asset allocation is crucial in 2026.

Ready to Optimise your Portfolio for 2026?

At Liquide, we specialise in crafting personalised investment strategies for high net-worth individuals. Whether your goal is to optimise equity exposure, add precious metals like gold and silver, or diversify internationally, our team works with you to build a resilient, well-diversified portfolio focused on long-term wealth creation.

You can download the Liquide App and connect with us directly to start planning for a steady and rewarding 2026.

 As the year turns, we wish you a very Happy New Year and a year ahead that is balanced, thoughtful, and financially rewarding.