“That is an exceptionally rare performance in the markets. Normally markets have a negative year every three years,” Sunil Sharma, Chief Investment Strategist at Ambit Global Private Client, told ET Markets. “This data point highlights India’s consistent, structural growth, continued government reform mindset, the country’s strong demographics, as well as the financial trend that is driving ever-increasing flows into the markets.” Putting the performance in a global perspective, Dhiraj Relli, MD & CEO, HDFC Securities, said: “The past decade has been nothing short of a dream for the Indian markets, delivering positive annual returns in each of the last ten years. This performance is truly remarkable and even exceeds the expectations of the Indian markets. The impressive bull run of the S&P 500 between 2009 and 2017, when it delivered positive returns in eight out of nine calendar years.”
Also read | Sensex and Nifty will end 2025 as the worst performers in the world. Could 2026 change the script?
The year was marked by wild FII selling of around $18 billion as foreign liquidity moved to other global equity markets including China, Japan, Europe and the US. But domestic investors continued to believe in it, with SIP flows rising to around Rs 3.2 lakh crore in CY25 alone.
The broader markets saw bigger corrections as domestic liquidity concentrated in large caps and IPOs absorbed paper from departing promoters and private equity players. Highlighting the market’s ability to weather unprecedented storms, Relli said: “During a decade marked by historic events both domestically and globally, including demonetisation, GST reforms, the COVID-19 pandemic, the Russia-Ukraine conflict and unprecedented tariffs on the global and Indian economies, Indian markets have not only demonstrated remarkable resilience but also thrived on solid underlying macroeconomic fundamentals.”Highlighting India’s consistent positioning, he said: “India has consistently ranked among the world’s fastest-growing major economies over the past decade, justifying its valuation premium over other emerging markets.”
The structural pillars supporting this rally, according to Relli, include “strong corporate balance sheets, ample liquidity, increasing financialization of savings, sustained government capital spending, supportive monetary and fiscal policies, and effective inflation management.”
Pointing out the broader implications for investor behavior, Sharma said, “In a world where disruption is constant, one must also note that the Nifty has done a commendable job in index updating. This kind of track record gives confidence and comfort to long-term investors and invites those investing in low-yield instruments like fixed deposits to consider equities.”
Relli added, “The performance of the Nifty over the past decade is also a strong testament to the benefits of long-term investing.”
Dalal Street Eyes 11th year in a row
According to consensus on Dalal Street, the winning streak could be extended for an eleventh year in 2026. Nomura has set a target of 29,300 for Nifty, Goldman Sachs 29,000, Kotak Securities 29,120, Axis Securities 29,500, Emkay 29,000 and ICICI Securities 29,500.
For Sensex, Morgan Stanley has set a target of 95,000, while HSBC is targeting 94,000.
“Corporate earnings are expected to improve, aided by government fiscal measures and monetary easing by the RBI, indicating a broad-based cyclical recovery in the economy. Clear sectoral leadership is likely to be driven by domestic cyclicals and consumption, while exports could gain momentum as tariff-related uncertainties recede and the rupee stabilizes,” Bajaj FinServ AMC said.
However, Relli issued a cautionary note for 2026: “While India’s structural story remains favorable heading into 2026, supported by rising disposable incomes, a growing middle class, healthy corporate balance sheets and favorable government initiatives such as GST Rationalization 2.0, investors should not rely solely on historical precedents.”
He advised a disciplined approach: “The focus should be on investing in quality companies with strong fundamentals at reasonable valuations, rather than chasing speculative returns. While the valuation froth on Indian equities has eased from previous highs, investors should remain cautious about continued high valuations in certain sectors after the stellar run of the last four years.”
As India enters its 11th consecutive year of market gains, the message is clear: structural growth, reform momentum and the financialization of savings have created a powerful cocktail that has kept Indian equities resilient even as global headwinds intensified. The question now is whether this extraordinary run can once again defy historical expectations.
(Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of the Economic Times)
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