NEW DELHI — The Nifty 50 index is projected to touch 29,300 by 2026—an increase of roughly 12 percent from current levels—supported by easing global geopolitical tensions, resilient domestic macroeconomic indicators, and a cyclical rebound in corporate earnings, according to a report released Tuesday.
In its analysis, Nomura said India’s equity valuations have finally returned to a healthier range after spending nearly 14 months lagging global markets. This reset, the brokerage noted, offers long-term investors an improved entry point and sets the stage for a broader market recovery.
The outlook coincides with a historic week on Dalal Street, where the Nifty 50 and Sensex surged to new all-time highs of 26,300 and 86,100, respectively. Bank Nifty also broke new ground, surpassing the 60,000 mark for the first time.
Nomura observed that strong domestic inflows continue to provide stability. Equity allocations remain steady at about 13 percent of gross financial savings in FY25, while primary market issuances are absorbing roughly 78 percent of that liquidity without weakening overall sentiment.
Although the firm does not expect a major resurgence in foreign institutional investment, it sees potential for incremental participation if the global AI-driven rally cools and risk premiums remain contained.
On corporate earnings, Nomura anticipates a rebound to low double-digit growth in FY26, supported by a favorable base and a pickup across commodity-linked sectors, including chemicals, oil and gas, cement, and metals. However, it cautioned that consensus forecasts for FY27 and FY28 may see modest downward revisions if the capex cycle slows or if India’s trade deficit remains elevated.
India enters 2026 with strong market momentum
In a separate report, PL Capital said India’s financial markets are heading into 2026 with renewed optimism, underpinned by a sharp rebound in October and a macroeconomic environment that remains resilient despite global uncertainty.
After three months of subdued performance, benchmark indices rallied strongly, with the Nifty 50 gaining 4.5 percent and the Sensex rising 4.6 percent — their best performance in several months.
PL Capital attributed this turnaround to a series of domestic tailwinds, including accelerated consumption following GST 2.0 rate rationalization, a surge in manufacturing activity reflected in a two-month high PMI of 58.4, and the return of foreign institutional investors as net buyers after an extended period of outflows.
The recently signed Trade and Economic Partnership Agreement (TEPA) with EFTA nations further bolstered sentiment by opening tariff-free access to key European markets, strengthening India’s long-term export outlook. (Source: IANS)
