The latest gross domestic product (GDP) data is expected to boost market optimism, following record high levels touched on Thursday, although maintaining momentum remains a challenge. On Friday, the BSE Sensex declined by 13.7 points, or 0.02%, closing at 85,706.67, while the NSE Nifty 50 slipped 12.6 points, or 0.05%, to settle at 26,202.95.
“This week the markets didn’t quite take a clear direction, however towards the latter half of the week it turned positive. The GDP data at 8.2% real growth rate is likely to fuel further optimism for the next week,” said Vikas Gupta, CEO & Chief Investment Strategist at OmniScience Capital.
He added that Industrials and Manufacturing combined with Services, especially financial services and banks are likely to see a sharp positive impact. “The focus should be on the longer-term impact, where strong manufacturing and exports growth, steel consumption, double-digit bank credit growth are indicative of future economic health, all combined with low inflation,” stated Gupta.
India’s economy grew at a six-quarter high of 8.2% in the July–September (Q2FY26) quarter compared with 7.8% in the previous quarter, according to official data released on November 28. The growth numbers were significantly higher than estimates.
Vinod Nair, Head of Research, Geojit Investments, said that the stronger-than-expected Q2 GDP print, driven by resilient manufacturing, solid construction activity, and healthy private consumption, is set to support sentiment in the near term.
“With robust GDP momentum and improving credit growth providing a solid backdrop for earnings acceleration in H2, the medium-term outlook remains positive. However, pockets of short-term volatility may persist, influenced by global cues and central bank policy announcements,” added Nair.
He stated that investors will now focus on a critical lineup of macro data, including India and U.S. PMI releases, U.S. core PCE inflation, initial jobless claims, and, crucially, the RBI’s policy decision. Global cues remained supportive, aided by softer U.S. yields, renewed expectations of a Fed rate cut, and benign crude prices that helped temper inflation concerns.
Ankit Patel, Co-founder and Partner, Arunasset Investment Services, told TNIE on Thursday that with the market already at fresh highs, the obvious question is whether 2026 still has fuel left and the answer is an emphatic yes.
“India appears to be easing into a reflation phase largely because nominal GDP hasn’t been running at the pace a high-growth economy needs. Very low inflation looks neat in isolation, but it brings its own issues. When prices barely move, companies struggle to pass on costs, revenue growth slows, wages gain less momentum, and tax collections don’t climb fast enough to support government spending. It’s a calm surface with an undercurrent of slack, and it needs a push,” he added.
He explained that reflation is the push. Not an aggressive policy sprint, but a gentler shift toward easier money, better liquidity and smoother credit flow so demand doesn’t fade just when balance sheets are strong enough to grow. If this holds through next year, FY26 could be the point where earnings widen out properly, with Nifty 500 profits rising 15–20% as demand increases.
