NEW DELHI — India’s benchmark Nifty index is projected to climb to 29,300 by 2026, roughly 12 percent higher than current levels, driven by easing geopolitical tensions, strong domestic macro fundamentals and a cyclical rebound in corporate earnings, according to a new report released Tuesday.
Nomura said India’s equity valuations have returned to a more reasonable range after nearly 14 months of lagging global markets, creating what it described as a healthier long-term entry point for investors and setting the stage for a broader market recovery.
The outlook follows a record-setting week on Dalal Street, where the Nifty 50 and Sensex hit new lifetime highs of 26,300 and 86,100, respectively. Bank Nifty also crossed the 60,000 mark for the first time, underscoring strong market momentum.
Nomura said resilient domestic inflows continue to provide a stabilizing foundation for equities. Equity allocations remain near 13 percent of gross financial savings in FY25, while primary market issuances are absorbing about 78 percent of that liquidity without dampening sentiment.
The report noted that while a major surge in foreign institutional investment is unlikely, incremental gains are possible if the global AI-driven equity rally cools and risk premiums remain contained.
On earnings, the brokerage expects low double-digit growth in FY26, supported by a favorable base and recoveries across commodity-linked sectors, including chemicals, oil and gas, cement and metals. It cautioned, however, that estimates for FY27 and FY28 may face modest downward revisions if the capex cycle weakens or if the trade deficit remains elevated.
India enters 2026 with new momentum, market revival
A separate report from PL Capital said India’s financial markets are heading into 2026 with renewed confidence after a strong rebound in October and a macroeconomic environment that has held firm despite global uncertainty.
Following three months of subdued trading, the Nifty 50 and Sensex surged 4.5 percent and 4.6 percent, respectively — marking their strongest showing in several months. PL Capital attributed the turnaround to multiple domestic drivers, including the GST 2.0 rate rationalization that boosted discretionary consumption, a jump in manufacturing activity reflected in a two-month high PMI of 58.4, and the return of foreign institutional investors after an extended phase of outflows.
The signing of the Trade and Economic Partnership Agreement with EFTA nations added to the momentum by granting tariff-free access to key European markets and strengthening India’s long-term export outlook. (Source: IANS)
