India set to outperform global financial markets in new year

Sharing his annual outlook for the new year, S Naren, Executive Director and Chief Investment Officer at ICICI Prudential Mutual Fund said 2025 turned out to be a “year of hibernation” for Indian markets, even though the country’s macroeconomic fundamentals remained strong.

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“India maintained low fiscal and current account deficits, controlled inflation and healthy economic growth,” Naren mentioned.

Despite these positives, Indian equities failed to deliver strong returns and the rupee underperformed against most global currencies, including the US dollar.

Looking ahead, Naren believes the situation could change in 2026. He said Indian markets are well placed to do better than most global markets in the coming year.

“India continues to offer one of the strongest growth stories over the next decade, supported by favourable demographics and long-term economic potential,” he mentioned.

Naren advised investors to focus on proper asset allocation rather than chasing short-term returns.