Indian Markets Set For Domestic-Led Recovery In 2026, Says Herald Van Der Linde
Beyond traditional heavyweights, Herald highlighted India’s market depth compared to regional peers. He also pointed to specific niche industries as potential growth engines.
After a difficult start to 2025, where Indian equities faced immense pressure and underperformed against most global peers, the worst is officially over and the stage is set for a broad-based market recovery in 2026, driven by domestic consumption, according to Herald Van Der Linde, Head of Equity Strategy, Asia Pacific at HSBC.
Speaking to NDTV Profit, Herald noted that estimates for Indian markets in 2026 are already outpacing 2025 projections, and there could be brighter days ahead for the market.
"The worst of these earnings downgrades are behind us," he said. "Consensus is looking for better earnings in 2026 than 2025, and you see that comes from quite a broad basis, not just one company that drives us."
For 2026, Herald believes India's internal economy will thrive rather than export-oriented sectors. He identified banking, automobiles and consumer goods as the primary 'frontrunners' for the new year.
"I think we got to look at these domestic-oriented companies," he said. "Some of the banks look still pretty okay. I’m looking at some of the consumer companies, auto companies."
Beyond traditional heavyweights, Herald highlighted India’s market depth compared to regional peers. He also pointed to specific niche industries as potential growth engines.
"There are hospitals and medical equipment," he noted. "I would be looking at that and keep my export exposure somewhat limited."
While acknowledging that the Indian Rupee’s depreciation against the US dollar remains a risk for foreign investors, Herald believes the currency weakness might be nearing a bottom and potentially creates an attractive entry point.
Ultimately, he remains bullish on the structural growth stories visible within the Indian economy, driven by demographic shifts and rising GDP per capita.
"My suspicion is that we're going to have that pick up in sales growth a little bit," Herald said. "And some of that operational leverage story coming back into 2026."
