2026 Indian Stock Market Outlook: A Year of Average Returns, Patience & Cash
The Indian stock market has delivered exceptional returns over the last few years. But can the same continue in 2026? In this blog, I share my simple and honest view on why 2026 may be a year of average returns, range-bound markets, higher importance of cash, and better opportunities outside equities, especially in commodities.
My Outlook for Indian Equity Markets in 2026
Let me be very clear at the start —
I am not bearish on the Indian market.
I am also not aggressively bullish.
I am standing somewhere in the middle.
For 2026, I expect Indian equity markets to deliver around 8-10% returns, not more than that. The market may remain choppy, sideways, and range-bound for most of the year. This may not be a year where you see strong trending rallies like we saw earlier.
Because of this, my overall theme for 2026 is very simple:
High cash, selective equities, and higher allocation to commodities.
Why I Expect Average Returns in 2026
To understand the future, we must first understand the past.
Over the long term, Indian markets usually deliver around 12–15% CAGR. That is healthy and sustainable. But markets do not move in straight lines — they move in cycles.
And in the last few years, we have already seen extraordinary returns packed into a very short time.
Let’s look at the data 👇
What Happened Between 2020 and 2025?
Nifty 50
From around 12,300 in 2020
To nearly 25,000+ levels
That is roughly 120% return in just 4 years
NIFTY 50
CNX Midcap Index
From around 21,000
To nearly 60,000
That is around 180% returns
MIDCAP100
If we calculate this properly, the market has delivered close to 25–30% CAGR, which is much higher than the long-term average of 15%.
The Problem: Too Much Return, Too Fast
Markets cannot keep delivering such high returns forever.
This is where the concept often discussed by experienced investors comes in —
“Lack of Returns Theory.”
When markets deliver too much return in a short period, the next phase usually looks like this:
Time correction (markets move sideways)
Valuation correction (earnings catch up)
Lower or average returns for a few years
That does not mean markets will crash.
It simply means markets may pause.
Broad Market vs Selective Opportunities
While I am not bullish on the overall market, that does not mean there are no opportunities.
There are:
Some companies available at reasonable or even cheap valuations
Some businesses growing at a very fast pace
Some stocks with strong fundamentals and long runways
I am very bullish on a few selected companies where:
Growth visibility is strong
Balance sheets are healthy
Management execution is clear
Valuations still make sense
These are the kinds of companies that can still do well and may even turn into future multibaggers, regardless of what the index does.
Why I Am Strongly Bullish on Commodities (Especially Silver & Copper)
One area where my conviction is very strong for this year is commodities.
Let me clarify one thing first —
I am not very bullish on gold at this stage.
But yes, I am very bullish on silver, and very bullish on copper.
Silver: A Multi-Year Breakout Story
If we look closely at silver, something very important has happened.
Silver has recently broken out of a long multi-year resistance, almost 9 years of consolidation. After staying sideways for many years, silver has finally moved into new all-time highs.
Such breakouts do not happen every year.
They usually signal the start of a bigger, long-term cycle.
Yes, silver is already at high levels.
Yes, commodities are currently stretched.
But structurally, silver looks strong, and this year can still be a very good year for silver from a bigger picture point of view.
SILVER
Copper: A Silent But Powerful Setup
Along with silver, I am also very bullish on copper.
Copper has also shown a multi-year breakout after staying in a long range. This kind of breakout usually reflects:
Strong global demand
Infrastructure growth
Energy transition themes
Long-term supply constraints
Copper often moves quietly, but when it starts trending, it tends to move for years, not months.
That is why copper is one of my high-conviction commodities for this phase.
COPPER
Note for readers:
I am sharing these two stock charts only as examples to show what a multi-year breakout can do over time. This is not a guarantee that the same will happen again, but it shows the kind of probability and potential such breakouts can carry. These examples are only for understanding and have no direct connection with my silver and copper view.
GRAVITA INDIA
The above chart is of Gravita India, a recycling company listed in the Indian market. The stock broke out from a 13-year long base, which in technical analysis is called a multi-year breakout. After this breakout, the stock delivered nearly 1000% returns in just around two years, showing what such long-term breakouts can potentially do.
TITAGARH RAILWAY SYSTEM LTD
The above chart is of Titagarh Rail Systems, a railway wagon manufacturer listed in the Indian market. Here as well, the stock broke out from a very long base of nearly 15 years, which is called a multi-year breakout in technical analysis. After this breakout, the stock moved up by roughly 800–1000% within just 1.5 to 2 years, clearly showing the power such long-term breakouts can carry.
Closing Notes
My final message to everyone reading this is very simple —
don’t be in a hurry to buy stocks in the Indian market.
Let the volatility settle. The market is not running away anywhere, at least according to my current view. Yes, I am open to changing my view if I see clear strength — for example, if the index shows a strong breakout or starts sustaining at new highs.
But even if the market makes a new high, I still don’t expect more than 8–10% returns for this year. That is why chasing prices or rushing into stocks does not make much sense to me right now.
My Approach Going Forward
My strategy is quite straightforward:
I will focus only on quality, high-growth companies
I will be very selective, not aggressive
I will keep a healthy cash position, because cash is also a position
I don’t need to buy the exact bottom to look smart or feel right. I am happy to wait for confirmation and then invest when the risk-reward looks favourable.
Remember:
Money saved is also money earned.
If I avoid unnecessary losses in a volatile market, I am already doing better than most.
On Commodities and Multi-Year Breakouts
As I showed earlier, multi-year breakouts can be very powerful.
Silver has already shown such a breakout and is in a strong long-term uptrend. Copper is also close to a similar structure.
That is why I remain bullish on commodities this year, especially silver and copper.
At the same time, I don’t expect the broader indices to perform exceptionally well.
But yes — some individual companies can still do very well, and I am bullish on those selective opportunities.
What’s Next
In my next blog, I will talk about:
The specific growth companies I am positive about
Where I see value in the current market
And how I am thinking about deployment going forward.
Disclaimer
This blog reflects my personal views and learning. It is meant purely for educational purposes. Please consult your financial advisor before taking any investment decision.