New Delhi, Jan. 10 -- Global brokerage firm Bernstein has revised its outlook on Indian equities to 'Neutral' from 'Selective Buy', citing stretched valuations, limited policy headroom, and a lack of fresh macro catalysts to drive outsized returns in 2026.

According to Bernstein, 2026 brings no new tailwinds to Indian equity markets. By definition, a Neutral rating means that returns on investments are likely in line with broader market returns.

The downgrade comes after several years of strong market performance fuelled by government-led capital expenditure, robust domestic inflows and optimism around the China+1 manufacturing narrative.

In its India Strategy Outlook published recently, Bernstein said the Indian equity story is not tu...