Indian equity markets are seeing a steady flow of corporate updates across sectors, but investors appear reluctant to react sharply, suggesting much of the near-term optimism may already be priced in.

Speaking to ET Now, Aditya Shah, Founder, Hercules Advisors noted that consumption, banking, NBFCs and insurance companies have reported a series of updates over the past several days. Despite this, benchmark indices have largely stayed range-bound, reflecting caution ahead of more decisive triggers.

Aditya Shah said expectations around third-quarter earnings were already well understood by the Street.

“I think that the market already knew that stable Q3 numbers would come in. The banking sector has grown by about 10% to 15%, the deposit growth there is at about 5% to 10%. If you look at the consumption numbers, if we look at the gold companies, they have seen a volume de-growth; however, the revenue growth on the back of higher gold prices continues to be at about 40%. A little bit of slowdown within the QSR space is what we are witnessing,” Shah said.

He added that overall earnings growth for the broader market is likely to remain modest but stable.

“Steady results are what I expect in Q3 from all of these companies. I expect Nifty 50 growth to be at about 5% to 10%, and individual companies will grow on their own,” he said.

Looking ahead, Shah identified a geopolitical development as the most significant trigger for markets in 2026.

“The biggest trigger in 2026 for the market will be the Indo-US trade deal. If that really happens, that really lifts the sentiment of the market and the market will then move on. If we do not see a trade deal, we will remain range-bound and stock-specific is something that you should go for,” he said, adding that the long-term outlook for Indian equities remains positive.

He said sectors such as consumption, banking, financial services, chemicals and capital goods remain attractive, while also describing these themes as “contra bets” at current levels.

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On banking and NBFC stocks, which continue to report robust growth numbers, ET Now asked how investors should position themselves amid varying valuations and risk profiles.

“So, from my perspective, I am very happy with the banking sector. The banking sector is telling you that the growth is at about 10% to 15% in terms of AUM or loan growth and 5% to 10% on the deposit side of it,” Shah said.

He outlined a three-pronged approach to the sector.

“Larger banks like HDFC and ICICI will continue to do exceptionally well. They will be steady compounders in your portfolio,” he said.