Large caps, banks, realty, gold: ASK's roadmap to building wealth in 2026

ASK Investment Managers continue to focus on domestic-oriented companies. While markets rebound, it's essential to stay anchored in businesses with robust fundamentals and growth visibility.

If October felt like a turning point for investors, that’s because it was. Markets finally found their rhythm again—helped by global rate cuts, easing trade tensions, and India's strong earnings season. ASK Investment Managers’ latest monthly outlook gives a detailed look at where the economy stands and how investors should think about deploying money going into 2026.

 

Here’s what it means for your money— in plain English.

 

Markets Are Rising — But Stay Selective

 

Indian equities gained 4–5% in October, joining a global rally after the US Federal Reserve cut rates for the second time. The BSE 500 index is up 5.8% YTD, and rate-sensitive sectors like banks and real estate led the surge. 

All sectoral indices made gains, with rate-sensitive sectors like banks and realty among the top performers. By contrast, IT and export-oriented pharma lagged, weighed down by global uncertainty and muted deal momentum. FMCG and Staples saw selective gains but remained range-bound on slowing volumes and rural demand divergence.

In terms of Q2 earnings, Capital Goods, Real Estate, and PSU Banks outperformed,

 

However, the rally is narrow. Just 26 stocks accounted for 60% of market gains in October, meaning not everyone is participating. For everyday investors, this matters: broad rallies are more stable; narrow ones demand caution. 

In October 2025, just 26 stocks accounted for 60% of the BSE500’s ₹18 trillion increase in market cap versus previous month. By contrast, during February–October recovery phase, 50 stocks contributed to the same proportion of gains. Thus, the breadth

 

Takeaway for you:

Avoid chasing momentum stocks or themes trending on social media. Focus on quality and diversification.

 

Large-Caps Over Small-Caps: Stability Matters

 

ASK maintains a strong preference for large-cap stocks, citing:

• Earnings resilience
•  Better valuations compared to mid & small caps
•  Ability to withstand uncertain global conditions

 

Personal finance POV:

If you’ve gone heavy on small-caps recently (many have), it may be time to rebalance.

 

Indian Economy: Solid Footing, Strong Earnings

 

Despite mixed global cues, India looks strong:

 

• Sales up 5% YoY
• EBITDA up 14%
• PAT up 13%

 

FIIs Are Back — That’s a Confidence Booster

 

Foreign institutional investors bought $2.5 billion in October after months of selling. Domestic institutions remained steady buyers too.

 

Money flowing in = stabilizing sentiment.

 

Gold & Oil: What Investors Should Know

 

Gold:

After hitting ~$4,300/oz, gold corrected to ~$3,980/oz. But structural demand remains strong — especially from central banks.

 

Gold will likely remain relevant as a hedge during volatile global conditions.

 

Oil:

Crude slipped to around $65/barrel, easing inflation pressure and helping India's macros.

 

Your takeaway:

Hold your gold allocation (10-15% of portfolio max), but don’t increase aggressively after the run-up. Lower oil supports equity markets—stay invested.  Portfolio Positioning

ASK portfolio allocation continues to favour domestically oriented, fundamentally strong businesses with visibility across growth, margins, and policy tailwinds. The emphasis remains on sectors that are likely to benefit from lower interest rates, steady rural demand, and infrastructure-led multiplier effects. 

Financial services

• It remains selectively constructive on large private players that continue to trade at a discount to their long- term average valuations despite demonstrating stable asset quality and earnings growth.
• Credit growth expected to remain double-digit in FY26, with an H2FY26 recovery on policy tailwinds and improving sentiment.
•  From low bad loans to clean balance sheet and robust credit growth to valuation comfort – banks are witnessing multiple tailwinds.

Capital Markets & Exchanges

• Expected beneficiaries of healthy GDP growth, rising market cap/GDP, financialisation of savings and rising equity market participation.

• Structural volume tailwind for demat growth, aided by record retail participation and deeper penetration outside Tier-1 cities.

 

Cement

• As industry consolidation gains ground, cement makers are focused on balancing volume growth and profitability.

• Cement prices are likely to recover sharply over the medium term as macroeconomic conditions improve.

• With recent price hikes and benign cost trends, EBITDA per tonne is expected to improve.

 

Defence / Infrastructure / Manufacturing

• The Make-in-India initiative and Production-Linked Incentive (PLI) schemes enabling domestic companies to compete with global players

• As per Budget documents, India’s defence spending has outpaced its neighbours since 2010. India aims to increase exports by 2.1x to ₹50,000 crore by FY30 from ₹23,600 crore in FY25.

• Favourable conditions like clean balance sheets of banks, stable government policies, and a low-interest rate environment are beneficial for companies from infra and manufacturing segments.

 

Automobile and auto components

• Constructive on 2W and Select PV OEMs: Rural demand uptick and input cost relief support recovery.

• Brand Agnostic: Auto ancillaries are relatively insulated from shifts in customer brand preferences, offering more stable growth prospects across cycles.

 

Real estate

• Positive outlook on the premium segment.

• Sustained demand: Continues to gain on the sustained demand at the premium end.

• Macro tailwinds: End-buyers expected to benefit from the rate cuts.

 

Hospitals

• With only 1.4 hospital beds per 1,000 people – far below the WHO benchmark of 3.0 – India’s healthcare infrastructure presents significant long-term growth potential.

• Emerging private sector players have gained traction over the past decade and are actively scaling operations.

 

Themes liked be ASK: 

• China+1 and global supply diversification

• Growth revival – Rural recovery and affordable consumption

• Rate Sensitive Plays – NBFC, PSU Banks, Select Private Banks, Real Estate

• Make-in-India, Digital Infrastructure, and public capex

• Defence Export and Select Manufacturing opportunities

• Transition in the energy sector