After experiencing fluctuating sentiment for months and lagging behind global counterparts for a year, the primary indices on Dalal Street have silently regained stability. Achieving record highs recently indicates that the market has moved beyond the disruptions caused by last year’s tariff-induced correction.
With consistent domestic inflows, resilient earnings performance, and a more predictable macroeconomic environment, new medium-term forecasts are now being considered. As per reports from Reuters, global brokerage firm Nomura has revised its forecast for the Nifty 50 index, anticipating it to reach approximately 29,300 by the close of 2026.
Nomura’s revised outlook reflects expectations of a more robust earnings recovery, increased economic momentum, and a calmer global landscape compared to the challenges faced by investors in 2024 and early 2025. The firm’s shift in perspective last May, following market stabilization post the US import duty hike fallout, has been supported by various indicators such as stable inflation rates, a resurgence in cyclical demand, and clearer policy direction.
India’s recent underperformance has facilitated a recalibration of previously stretched valuation premiums, mitigating downside risks. The positive trajectory of the earnings cycle, bolstered by domestic demand and stable global conditions, reinforces Nomura’s belief in a favorable market outlook for the next two years.
Nomura’s sectoral preferences favor industries traditionally thriving in early economic upswings, including financials, manufacturing-related sectors, real estate, telecom, and cement. Additionally, it identifies strength in pharmaceuticals, IT, and non-banking financial institutions. Conversely, caution is advised for consumer staples, healthcare services, infrastructure, and capital goods due to high valuations relative to short-term earnings prospects.
Highlighted stocks in Nomura’s 2026 outlook include ICICI Bank, Axis Bank, Infosys, UltraTech Cement, Mahindra & Mahindra, and Bajaj Finance, known for their strong balance sheets, earnings visibility, and global cycle resilience. However, potential risks such as escalating global risk premiums, sudden commodity price surges, and geopolitical tensions pose threats to market stability. It emphasizes that narrative-driven stocks may see limited upside, emphasizing the importance of selective investment strategies.
Nomura remains optimistic about the Nifty potentially reaching 29,000 by 2026, contingent on a strengthening earnings cycle, consistent policy backing, and stable global conditions devoid of unforeseen disruptions.