Indian Equity Markets Face Cautious Outlook Amid IPO Supply and Valuation Corrections

Indian equity markets face a cautious outlook in 2026 amid increased IPO supply, geopolitical uncertainties, and valuation corrections, particularly in mid- and small-cap segments. Experts note resilient domestic inflows and stable corporate balance sheets, with selective buying opportunities in large caps and sectors like financials, pharma, and autos. Market sentiment may improve post-Union Budget, though earnings growth is expected to remain moderate. Regulatory efforts aim to address derivatives market excesses, emphasizing risk management amid ongoing global and domestic challenges.