Nifty to touch 29,300 level by 2026 amid robust domestic macro indicators, easing geopolitics: Report

New Delhi, Dec 2 Nifty will touch the 29,300 level by 2026, a jump of about 12 per cent from the current level, supported by ease in global geopolitics, resilient domestic macro indicators and a cyclical earnings recovery, a report said on Tuesday.

Nomura, in its report, said India's equity valuations have finally settled into a more reasonable zone after nearly 14 months of trailing global markets. The brokerage says this reset provides long-term investors with a healthier entry point and paves the way for a broader market revival.

The sentiment has come in tandem with a record-setting week on Dalal Street, where both Nifty 50 and Sensex scaled new lifetime highs of 26,300 and 86,100, respectively. Bank Nifty, too, made history by surging past the 60,000 mark for the first time.

Nomura noted that strong domestic inflows continue to act as a stabilising force.

Equity allocations remain steadfast at approximately 13 per cent of the gross financial savings in FY25. Primary market issuances are soaking up close to 78 per cent of that liquidity without upsetting the overall sentiment.

While the firm is not expecting a dramatic spike in foreign institutional participation, it does see potential for incremental gains if the global AI-driven rally cools and risk premiums stay manageable.

On the earnings front, the brokerage expects a rebound to low double-digit growth in FY26, aided by a favourable base and a rebound across commodity-linked sectors such as chemicals, oil and gas, cement and metals.

However, it does caution that consensus forecasts for FY27 and FY28 may be subject to some modest downward revisions in case the capex cycle loses steam or if India's trade deficit stays persistently high.

India’s financial markets enter 2026 with renewed confidence

Earlier, PL Capital said that India’s financial markets are heading into 2026 with renewed confidence, riding on the back of a decisive rebound in October and a macroeconomic environment that continues to demonstrate resilience despite global uncertainties.

After three months of subdued movement, benchmark equity indices surged, with the Nifty 50 and Sensex recording gains of 4.5 per cent and 4.6 per cent respectively -- their strongest performance in several months.

This sharp turnaround was fuelled by multiple domestic triggers, including the GST 2.0 rate rationalisation that accelerated consumption across discretionary categories, a surge in manufacturing activity reflected in a two-month high PMI of 58.4, and the return of foreign institutional investors, who turned net buyers after a prolonged phase of outflows, PL Capital said in its report.

The signing of the Trade and Economic Partnership Agreement (TEPA) with EFTA nations added further momentum by opening tariff-free access to key European markets, strengthening India’s long-term export prospects.

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