Stock market fireflies fade but value glows

Indian equities are entering a far more selective phase in 2026, leaving behind the pandemic-era rally that lifted stocks almost indiscrimi- nately. A liquidity- and retail- fuelled boom has given way to a market where returns hinge squarely on earnings durabil- ity rather than momentum.

- Abhinaba Saha & Niti Kiran

Indian equities are entering a far more selective phase in 2026, leaving behind the pandemic-era rally that lifted stocks almost indiscriminately. A liquidityand retailfuelled boom has given way to amarket where returns hinge squarely on earnings durability rather than momentum.

Investors should expect fewer winners, wider return dispersion, and stock selection to matter far more than market direction, experts said.

Between 2020 and 2023, nearly 97% of BSE 500 constituents delivered positive returns, with three-fourths rising more than 80%, according to a Mint analysis of 400 of the BSE 500 stocks. The broad-based rally created a rare environment where momentum often outweighed fundamentals.