As Indian equities head into 2026 after scaling fresh record highs, the spotlight is shifting from headline index levels to earnings visibility, valuation comfort, and stock selection.

Speaking to Kshitij Anand of ETMarkets, Vikas Khemani, Founder & CIO of Carnelian Asset Management and Advisors, says he expects the Nifty to trade in the 28,000–29,000 range in CY2026, even as broader markets undergo selective churn.

Khemani explains why returns in the coming year are likely to be driven by disciplined stock picking rather than index momentum, shares his views on sectoral leadership, the role of gold and currency movements, and outlines how investors should position portfolios to navigate a fundamentally driven but selective market environment. Edited Excerpts –

Q) We have hit fresh record highs in November, with a 10% gain so far this year. How are we placed for 2026?

A) Indian equity markets are entering 2026 on a strong footing, supported by recovery in economic growth, improving corporate earnings, liquidity and policy support.

While indices are at record highs, the important point is that the market has already seen a phase of correction in many stocks in the last 18 months and removal of froth to an extent in many pockets.

India continues to stand out globally due to its domestic demand, manufacturing push, and policy stability. India also continues to benefit also from government-led infrastructure spending and a steady push towards manufacturing.

We expect the Nifty to be in the range of 28000-29000 in coming CY2026. Returns will come more from select stocks and sectors. This will be a market where discipline and stock selection matter more than Index momentum.

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Q) Gold and silver outperformed by a wide margin in 2025. How will precious metals play out in 2026? Any triggers to watch out for?**
A) The strong performance of gold and silver in 2025 was driven by a combination of global uncertainty, geopolitical tensions, currency volatility, and expectations of a change in global interest rate cycles. These factors led investors to seek safety in precious metals.

Looking ahead to 2026, precious metals may not see the same sharp upside, but they will continue to play an important role as a hedge in portfolios.

Gold, in particular, should be viewed as a portfolio stabiliser rather than a primary return driver. Investors should avoid chasing past returns and instead maintain a measured allocation for diversification.

Q) The rupee has crossed 90 against the US dollar. Are we headed towards 100? What is causing the fall? A) The recent depreciation is largely driven by global factors, particularly the continued strength of the US dollar amid higher US interest rates attracting capital flows.