The Kotak market outlook October 2026 — Nilesh Shah calls this a kangaroo market, neither bull nor bear. Kotak stays equal weight equity because the market is fair, overweight gold, and says returns from here are likely to moderate.
Kotak market outlook October 2026: a kangaroo market, neither bull nor bear
This month’s Kotak market outlook October 2026 D-Kode briefing comes from Nilesh Shah at Kotak Mutual Fund. Read alongside the Kotak September outlook and the DSP Netra October edition.
EQUITY
GOLD
SILVER
MARKET CAP
Summary
For two years the Nifty has moved between 22,000 and 26,000. The Kotak market outlook October 2026 paradox, in his words, is that the economy is doing well and earnings are doing well and yet markets are down.
If it stays here, this is the Nifty’s first negative calendar year after almost eight positive ones.
The detail
Global: debt, oil and the AI bill
COVID, stimulus not withdrawn on time, tariffs and the Middle Eastern war have left the global economy fragile. Governments spent more than they earned and advanced-economy debt to GDP is at wartime levels; he cites global debt above $365 trillion. Rates have risen steadily while real yields stay low, though not as low as in earlier phases.
Oil is back in triple digits after the Strait of Hormuz locked and the Houthis disrupted Red Sea transit — though the crude futures curve is in backwardation, so the market expects the conflict to settle. Planned spending on AI data centres, chips and power to 2030 is around $8 trillion, and AI-related debt raised in nine months exceeded $450 billion, more than double all of 2025.
India: the economy is fine, the market is not
Real GDP growth is in the 7% handle, credit growth is back in double digits, manufacturing capacity utilisation is inching from 75 to 80, and high-frequency indicators give him confidence on the September quarter.
The challenges: power demand has outrun generation, taking the energy shortage from about 98 million units to 544 million; the June-to-September rain deficit is about 13%; the rupee is near an all-time low with the June-to-August FCNR-B gains evaporated, to some extent on FPI equity and FDI outflows; and the Eighth Pay Commission lands in the FY28 budget.
Why the market is down, and what to expect
He rejects the bear-market label — a bear market is a 20% drop, and on 28 September midcaps sat at their September 2024 high, small caps about 2% above their own, and only the Nifty 50 was down about 11%. A perception of a bear market, not one in reality.
FPIs sold in CY24, CY25 and CY26, more in nine months this year than in either of those, while domestic institutions kept buying. Over ten years FPI net flows are minus $3 billion against $324 billion of DII buying; he attributes the gap to supply — over $170 billion raised in three years through IPO, QIP and OFS. He stresses the selling is in the secondary market: in the primary market FPIs were buyers.
What this means for investors
Action points
His guidance centres on moderating expectations and staying with the fair-value call:
The Kotak market outlook October 2026 D-Kode briefing sits alongside the Kotak September outlook and the DSP Netra October edition. For the underlying regulatory framework, see the Association of Mutual Funds in India.
Mutual fund investments are subject to market risks. Please read all scheme-related documents carefully. The views expressed are those of the speaker and do not constitute investment advice.
