Diwali 2026 will be remembered for long.

Don't go by the index valuations, but by the basis of stock valuations. Individual stocks have corrected beyond 50% where the index may not be 1/4th of the same. Don't judge the book by the cover, but read the same.

LTG is going to change, and it is to uplift the sagging stock market, which is the actual mood that decides the fate of who wins UP elections. Indian markets lack return opportunities due to steep INR depreciation, followed by lacklustre returns from large caps. Inflation is topping off the cake of this poor return outlook. You will find LTG tax structures changing not only for FIIs but also for domestic investors.  We have elections in hand in Feb-March 2027, and hence the stock market plays a critical role in revival. Meanwhile, world leaders are looking ahead to resolving the Iran-U.S. war issue. The market is about to witness a major turnaround, and the current biggest boon is that the last 10 days' market correction has created a reset for market valuations. The mid-cap and small-cap correction has created a huge opportunity for investing.

Please note that any changes in the global situation from the current high level of bad news, like crude prices, followed by higher inflation expectations in H2 of FY-27 and high interest rate hikes of 50bps to 75bps will get wiped out, and the market will create new highs once the changes from both ends of the world – global and domestic will create new highs for the market.

The height of bad news has already reached new highs, and the forward outlook of earnings is about to be revised, but any change in global affairs will create a reverse mode for the market. The LTG changes will be enough to uplift market sentiment and will also get many old investments to redeem and get invested in new assets and products, creating new highs for the market. LTG reduction will match the GDP growth of the Indian market with the stock market, and flow of capital will begin within Indian investors. But among all these, the biggest problem is asking clients to invest, since it requires more guts rather than just number analysis. But the truth is that the fundamental situations and global political issues are forcing many things to change, and the pace is much faster. For example, India witnessed the 1st rate cut post covid on 7th Feb 2027, and now within 18 months we are now heading for more rate hikes.  It's better to leave the decision for investing to financial advisors rather than applying one's own mind and limited herd mentality-based knowledge.

Coming to LTG reduction expectations, we have created various models showcasing the different impact analysis for the investors and also the behavioural analysis on the investor mind.

But be careful: the bear cartel in the market has already targeted the retail investors, where SIP amounts and returns are being criticised. Today we all know that if we have Rs.100 SIP – Rs 80 is stopped, and the rest of the Rs.20 gets invested. But the way the bear cartel is criticising the same, soon we might witness Rs.100 invested and Rs. 200 being pulled out. This will become a major issue, particularly if the investors who have started SIPs in the last 6 years start pulling out the money. The bear cartel of the market is looking for all the bad news for the market and more interest rate hikes.  Don't get into the trap of stopping your SIP just because some renowned bear cartel player in the stock market said something. 

So the market is about to witness many things before Diwali 2026. This Diwali will be remembered for a long.