Pre-Budget 2026 Outlook **Policy & Macro Environment** As **Budget 2026** approaches, market focus is shifting toward policy continuity and clarity against a backdrop of geopolitical risks. Investors are specifically monitoring potential structural changes, with high anticipation for relief on **capital gains tax**. **Sentiment & Valuation** While recent returns have been muted, this consolidation offers a tactical advantage. The current environment of measured expectations significantly increases the probability of positive surprises if policy outcomes exceed conservative estimates. **Liquidity Trends** Domestic capital flows remain a strong support pillar. Systematic Investment Plans (**SIPs**) are projected to continue their steady rise, ensuring consistent liquidity absorption regardless of global volatility. **Sector Watch: Private Banks** Private sector lenders are emerging as a high-conviction theme. With the interest rate cycle approaching its peak and subsequent reversal, these institutions are well-positioned to capitalize on improved margins and credit growth.