Where is Indian stock market headed in 2026?

Dear reader, as 2025, a year of global tumult and volatility, rolls by, Mint's reporters and columnists look around the corner on what is coming in 2026—to help you know what to expect and prepare for it. Tell us what you think at [email protected].The Nifty 50 and S&P BSE Sensex are among the worst performers globally, even as markets elsewhere surge: South Korea’s Kospi leads with 67.5% gains in 2025 so far, followed by Brazil at 31.6% and Hong Kong’s Hang Seng at 28%.Indian equities trailing global peers this year has prompted investors to ask whether this is a passing phase or a deeper trend.

Money managers say it’s hard to call either way, but one thing is clear: this is firmly a stock picker’s market.The year is likely to unfold in two phases, with the first marked by lack of direction despite improving domestic conditions and valuations, as global headwinds cap upside, said Aashish Somaiyaa, chief executive officer, WhiteOak Capital Asset Management.Once the uncertainty surrounding the US economy and global politics clears, he expects markets to bounce back. Significant foreign investment will likely return only after global markets see an imminent correction.Foreign institutional investors (FIIs) have swung between buying and selling this year, net selling in five of the 11 months through November and buying in six.

After three straight months of selling till September 2025, they turned net buyers in October and November, only to slip back into selling mode again this month up to 15 December, NSDL data showed.In contrast, domestic institutional investors (DIIs) have remained steady buyers throughout 2025, though the pace of inflows has eased since November. October saw the strongest DII inflows of 2025, the