Stock markets may deliver gains of up to 15%! Tech firms, retail & more — What Mark Mobius expects for Dalal Street in 2026

Mark Mobius, a veteran emerging markets investor, has a bullish outlook for India, expecting double digit returns. The trader has allocated almost 30% of his portfolio to the country, predicting gains of 12%-15%. Speaking in an interview with ET, Mobius said that uncertainty in the United States has made caution essential for investors. “The outlook looks quite uncertain, particularly because uncertainty in the US is pronounced,” he said, adding that investors should remain invested but hold adequate liquidity. “I’ve been advising people not to go out of the market, but at the same time to be cautious and be ready with cash in hand.” He further added that capital preservation has become a priority, with cash acting as a buffer against volatility. “I would say the emphasis has got to be on capital preservation. People should keep maybe 20% in cash or got to keep some cash in reserve, because the market is quite uncertain.” His own portfolio, he said, holds around 20% in cash, along with downside protection. “I’ve put a lot of hedges on my purchases. I’ve used put options to protect myself on the downside.”On India’s performance this year, the veteran said that despite the ongoing global uncertainty, “India will do very well in 2026.” He pointed to the ongoing economic reforms under PM Modi and noted that easing investment bottlenecks could be a major support. “One of the big barriers India faces is the difficulty for investments to come in, and the degree to which it’s able to work on that will be very good for the economy.”‘India’s potential for growth is greater’ When compared with China, Mobius said that India is better positioned for stronger performance. “India will probably outperform for a number of reasons,” he said, citing favourable market dynamics, reform momentum and a shift in global sourcing. He said, “both markets are important, but India’s potential for growth is greater,” adding that stronger growth numbers, demographic advantages and supply chain shifts support India’s case. On expected returns, Mobius said gains are likely to be moderate rather than spectacular. “Probably low double-digit returns around 12-15%,” he said, noting that outcomes will depend heavily on developments in the US economy. “The US economy is huge and affects everyone. The dollar hasn’t been strong either.”The trader placed his confidence in companies that make extensive use of technology rather than those developing it. “About 30% of portfolio is in India, and the rest is in other EMs,” he said, adding that he is also buying US stocks with emerging market exposure due to their liquidity and global reach. Highlighting sectors offering value in India, Mobius pointed to retail and manufacturing. “Online shopping, delivery systems, and technology adoption are transforming retail. That’s very exciting,” he said. Manufacturing, particularly computer hardware, also stands out. “I’m bullish on India becoming a major supplier of computer hardware. Apple sourcing from India is just the beginning.” He also flagged chip software development as an overlooked area, noting that significant coding work is already being done in India for global firms, with potential for a domestic chip industry over time. Despite strong interest in India’s primary markets, Mobius said he avoids IPOs. What about metals? On precious metals, Mobius said gold is likely to remain range-bound. “Gold will probably maintain these levels but not go much higher,” he said, attributing its earlier rally to a surge in money supply during the Covid period. “It’s closer to 10%, so I don’t expect much upside, but gold is worth holding.” Turning to the US, Mobius warned that the rally in AI-related stocks may be overstretched. “Yes, it’s gone a bit too far,” he said, comparing current enthusiasm to previous technology booms. He further expects the US Federal Reserve to move towards easier policy next year. On currencies and bonds front, Mobius said the US dollar is likely to remain stable. “The dollar will probably stay where it is, not much weaker, but not strong either,” he said, adding that falling interest rates should bring bond yields down, benefiting holders of higher-interest bonds.