The global investment landscape has undergone rapid shifts over the past year, shaped by geopolitical tensions, aggressive fiscal spending, and the accelerating adoption of artificial intelligence. As markets step into 2026, investors are reassessing where to place their bets amid heightened uncertainty and evolving macro themes.

Speaking to ET Now, veteran investor, Manishi Raychaudhuri noted that the year has begun on a strong footing for Asian equities. “2026 has started with a bang,” he said, pointing out that MSCI Asia ex-Japan has already risen more than 4% within the first four to five working days of the year.

Raychaudhuri highlighted three to four dominant themes shaping the Asian equity outlook. The foremost among them is continued fiscal expansion across developed markets. He cited U.S. President Donald Trump’s “one big beautiful bill act” (OBBA), which is expected to put more cash in the hands of American households, alongside similar fiscal momentum in Europe.

“Germany, in particular, is expanding fiscally, with infrastructure and defence spending likely to reach around 5% of GDP over time. These are really big numbers,” he said. He added that parts of Asia, especially China, could also see increased fiscal spending as policymakers work to counter prolonged deflationary pressures.

Another overarching theme remains persistent geopolitical tensions, which Raychaudhuri described as self-evident given recent global developments. Closely linked to both fiscal expansion and geopolitical uncertainty is a notable rise in commodity prices.

“Precious metals did really well in 2025. Over the last quarter, even base metals like aluminium and copper have started performing,” he said. According to Raychaudhuri, the world could be on the cusp of a base metals supercycle, driven by surging demand from AI-related investments that may not be matched by adequate capacity additions.

AI capital expenditure itself continues to be a structural growth driver, led primarily by hyperscalers, though new entrants are also joining the race. This trend, he noted, benefits “picks and shovels” companies across North Asia, particularly in Korea, Taiwan, and China.

Taking these factors together, Raychaudhuri said his outlook on Asian equities remains positive. While headline indices have already moved up, leaving limited near-term upside of around 5% to 6%, he stressed that targets could be upgraded if earnings estimates continue to improve. “We are already seeing earnings upgrades in Asia, unfortunately not so much in India,” he added.

On India, Raychaudhuri pegged a Sensex target of 91,000 by the end of 2026, implying a potential upside of 7% to 8% from current levels. Despite the modest index-level return expectations, he said India remains overweight in his Asian model portfolio.