Motilal Oswal Predicts 2026 'Star Performer' Sectors: Banking to IT Lead Market Rally

• Motilal Oswal forecasts a positive Indian stock market in 2026, driven by improved earnings, policy support, and investor confidence after a mixed 2025.
• Optimism stems from RBI's 1.25% interest rate cut (repo at 5.25%), ₹2.5 lakh crore liquidity injection, GDP growth, low inflation (0.71%), and government's consumption-focused policies.
• Key 'star performer' sectors for 2026 include Financial, Consumption, IT Services, Healthcare & Pharma, and Industrial & Capital Goods.
• Investors are advised to focus on large-cap stocks due to expensive mid-cap and small-cap valuations, maintaining discipline and a long-term perspective.
• Domestic Institutional Investors (DIIs) now outweigh Foreign Institutional Investors (FIIs), indicating the Indian market's resilience and reliance on domestic strength.

Why It Matters: Motilal Oswal sees 2026 as positive for Indian markets, highlighting key sectors and large-cap focus.