Client Associates said that gold and silver will continue to be a key theme in 2026 and should remain a strategic allocation in investors’ portfolios.
“Valuations remain a key consideration in the 2026 outlook. While long-term growth prospects for Indian equities remain intact, elevated valuations and near-term moderation in earnings growth warrant a calibrated approach to equity exposure,” the CA note said.
The assessment expects earnings growth for Sensex companies to remain subdued in the near term, followed by a recovery over the medium term on the back of improving macro conditions and accommodative monetary policy.
Client Associates (CA) is a multi-family office (MFO) founded by Rohit Sarin and Himanshu Kohli. With over two decades in the industry, the company claims to manage over $7 billion in assets. The firm provides advisory services to HNIs and Ultra HNIs across India, with a presence in 10 major cities.
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Its estimates are based on Sensex intrinsic value assessment and a multi-factor framework. Indian equity markets will be supported by strong macro activity, proactive policy measures, and an eventual recovery in earnings through 2026, although global uncertainties are likely to cap near-term upside, the note said.
Liquidity conditions remain supportive, with domestic institutional investors playing an increasingly important role in stabilising the markets.Strong and sustained SIP inflows have helped offset periods of foreign portfolio outflows, and renewed participation by institutional investors could improve market depth and reduce volatility, particularly during global risk-off phases.
FY26 GDP growth has been revised upward to 6.8%, exceeding expectations set earlier in the year amid heightened geopolitical uncertainty.
“This growth trajectory translates into sustained domestic demand, higher corporate revenue visibility, and improved earnings potential across consumption-led sectors. High-frequency indicators, including manufacturing and services PMIs, remain in expansionary territory, while GST collections reflect resilience in underlying economic activity,” the CA note said.
Nitin Agarwal, Head of Investment Research, Client Associates, opines that equity markets in 2026 will likely be driven more by selective opportunities anchored in fundamentals and less by broad-based rallies. India’s domestic macro strength and improving earnings outlook remain supportive, but elevated valuations and global uncertainties call for a disciplined approach, he suggested, underscoring the importance of asset allocation over market timing.
Commodities take center stage
Agarwal said that gold and silver remain strategic allocations and will be a key theme in 2026.
Precious metals performed strongly in 2025, with approximately 60% returns by gold and 150% by silver, supported by a weaker dollar, geopolitical uncertainty, and shifting monetary dynamics.
Gold demand increased meaningfully, driven by central bank purchases, reinforcing its role as a strategic portfolio diversifier, while silver prices saw a sharp run-up amid global supply concerns and geopolitical developments, Agarwal said.
Client Associates remains underweight on silver and advises against taking fresh positions at current levels, as the risk-reward balance is presently unfavourable.
(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)