New Delhi, Jan. 3 -- The Indian stock market underperformed most major markets in 2025 due to heavy foreign capital outflow, weak earnings, stretched valuations, and concerns over US tariffs. The Nifty 50 rose 10.5%, while the Sensex climbed by 9% in 2025.

However, experts are optimistic about the return potential of the domestic market in 2026 due to better earnings prospects and favourable growth-inflation dynamics.

"We have a positive outlook on Indian equities and believe that Indian markets are well poised to retrace the underperformance of CY25, supported by better earnings prospects, supportive domestic macros, and an improved geopolitical situation," said brokerage firm Motilal Oswal Financial Services.

"The prevalent concerns ...