HDFC Bank, RIL, M&M, Divi's Labs, JSW Steel Are Macquarie's Top Core Choices As It Turns Optimistic For India

The balance of risk has tilted favourably, and the NSE Nifty 50 more likely to end near 30,000 level compared to 20,000, the brokerage said.

Revival of India's earnings growth premium, resumption of foreign fund inflows after a five-year hiatus will drive the domestic markets' relative outperformance, the global brokerage said.

Additional factor that will support India is the fact that it will act as a hedge against artificial-intelligence theme, Macquarie said. In many ways, India has performed like a low-beta compared to strong AI-fuelled bull markets elsewhere.

In five years, India has outperformed most of its emerging-market peers like China, South Korea with 80% return as strong thematics and long-term growth potential supported. However, Indian markets underperformed EMs in 2025, Macquarie said.

India's share has reduced to 15% in the MSCI Emerging Markets in 2025 compared to its 20% share in the previous calendar year, based on free-float market capitalisation. Meanwhile, on a count basis, India's weight expanded to 14% against China at close to 50% and Taiwan, South Korea at 7%.

According to Macquarie, three themes are going to dominate Indian markets in 2026. These are AI data centre capex going mainstream, India becoming more relevant to global supply chain, and king consumer waking up from slumber.