Markets have turned, 2026 will be ‘very exciting’ for Indian equities, says Ridham Desai

Subscribe to enjoy similar stories. Indian markets have already turned around from the worst period of dollar returns in over two decades, and 2026 will be an “exciting year" for domestic stocks, according to Morgan Stanley managing director Ridham Desai. In 2025 so far, the Nifty 50 and Sensex have risen 10% and 9%, respectively, hitting record highs, Desai said while speaking at the Hindustan Times Leadership Summit 2025.

While the world has been in a ferocious bull market, India has been the outlier, he said, adding that this has been the country’s worst relative year since 1993 in dollar terms. “Now, as we look forward, India's relative performance has already turned in November," Desai said. “…we're recouping some of our lost ground.

And this has come on the back of a big policy pivot that India itself made starting in February with rate cuts." The Reserve Bank of India’s (RBI's) Monetary Policy Committee (MPC) has cumulatively cut rates by 100 basis points since February and later announced to cut the cash reserve ratio (CRR) by 100 bps in phases. CRR is the proportion of deposits that banks must park with RBI. The central bank has backed this with massive doses of liquidity, as well as an easing of the regulatory burden on the banking sector, Desai said.

Investors are now watching the upcoming monetary policy on 5 December, amid a sharp depreciation in the rupee. The currency’s persistent weakness has heightened concerns about foreign outflows and potential pressure on the domestic economy, as it makes imports more expensive. But strong domestic growth data for July-September has muddied expectations of a rate cut, prompting traders to dial back risk, especially in rate-sensitive financial stocks.