Domestic earnings recovery is poised to support Indian equity markets in 2026, according to market expert Sudip Bandyopadhyay. Positive Q2 corporate earnings, driven by GST rationalization, tax relief, and increased consumption demand, are expected to continue. However, Bandyopadhyay emphasized that a sustainable, broad-based rally hinges on the return of foreign institutional investors (FIIs), who have been net sellers due to valuation concerns and geopolitical risks. While domestic factors are improving, FII participation is crucial for a significant market uptrend.