Speaking to ET Now, Bandyopadhyay said investors should view the recent trade developments as part of a broader structural shift rather than an isolated trigger.
Trade deals driving optimism
The India-US agreement, along with ongoing trade discussions with the European Union, the United Kingdom, Canada and West Asia, is creating a favourable macro backdrop for the Indian economy.
“These developments augur well for multiple sectors, particularly labour-intensive industries,” Bandyopadhyay noted, adding that expanding global trade partnerships could strengthen India’s export ecosystem and boost overall growth.
For capital markets, the sentiment shift is already visible.
Foreign institutional investors (FIIs), who had previously remained cautious, have started increasing exposure to Indian equities. According to Bandyopadhyay, this inflow is likely to begin with large-cap stocks before gradually moving into mid- and small-cap segments depending on risk appetite.
“Large-caps will see steady foreign buying first, which should support benchmark indices,” he said.
Investment strategy for 2026: Focus on quality
Bandyopadhyay reiterated his long-standing advice to investors: accumulate quality stocks in strong sectors rather than chasing speculative themes.
He continues to see compelling opportunities in:
- BFSI (Banking, Financial Services and Insurance)
- Specialty chemicals
- Agrochemicals
- Select manufacturing-linked segments benefiting from trade diversification
Specialty chemicals and agrochemicals show turnaround signs
The specialty chemicals and agrochemicals space, which faced significant headwinds in recent quarters, is now showing early signs of recovery.
Companies such as Navin Fluorine International Ltd, Aarti Industries Ltd, and UPL Ltd have reported encouraging quarterly numbers, indicating a potential turnaround.
Bandyopadhyay pointed to improving demand conditions and stabilising pricing trends as positive indicators.
Importantly, the “China+1” strategy remains intact, with global buyers continuing to diversify supply chains away from China. With 25–50% of output from many Indian specialty chemical firms exported to the US and Europe, the India-US trade deal could further strengthen order visibility.
“Good days are likely to return for this sector,” he said.
BFSI back in a big way
The BFSI sector has also delivered strong earnings, reinforcing investor confidence.
While he refrained from commenting specifically on Edelweiss Financial Services Ltd, Bandyopadhyay acknowledged that the broader industry performance has been robust.
One standout example, he noted, is State Bank of India (SBI), which posted better-than-expected results. The banking giant reported 13–14% growth and signalled confidence in sustaining or improving that trajectory in upcoming quarters.
Equally notable is the improvement in asset quality, which has reached levels not seen in years.
“All vectors are in place for growth,” he said, underscoring that BFSI appears structurally positioned for a sustained upcycle.
Outlook: Gradual but broad-based rally
While acknowledging that foreign inflows may not surge overnight, Bandyopadhyay expects steady accumulation in Indian equities as global investors reassess growth opportunities.
He advises investors to maintain a long-term strategy, focusing on fundamentally strong companies in sectors poised to benefit from global trade realignments and domestic economic resilience.
With trade momentum building and sectoral earnings improving, 2026 could mark a period of sustained market strength — led first by large-caps and gradually supported by broader participation across mid- and small-caps.
Disclaimer: The views expressed are those of the expert and do not constitute investment advice. Investors should consult financial advisors before making investment decisions.