The stock market delivered a less-than-satisfactory performance in 2025. Since January 2025, the Nifty has grown by 9.25%, nearly five percentage points lower than the returns recorded in 2024. Similarly, the Sensex has underperformed, registering growth around 2% lower than the previous year. Foreign Institutional Investors (FIIs) appeared to lose confidence in the Indian market during this period.
Throughout the year, FIIs recorded heavy sell-offs, while Domestic Institutional Investors (DIIs) provided support by absorbing much of the selling pressure. Major policy decisions related to GDP growth, GST relief, and interest rate cuts helped the market touch new highs, but overall gains remained below investor expectations. Now, brokerage houses believe that both the Nifty and Sensex could witness a strong rally in 2026.
According to global brokerage firm Morgan Stanley, the Indian equity market could see a sharp upswing in 2026. The firm projects the Sensex to reach 1,07,000 points by December 2026, a potential rise of around 26% from its current level of 84,675.08. However, it has also cautioned that in the absence of positive triggers, the Sensex could decline by nearly 10% to around 76,000. Nomura, on the other hand, expects several positive developments in 2026 and forecasts the Nifty to touch 29,300.
Goldman Sachs recently placed Indian equities in the ‘overweight’ category. While acknowledging that market performance in 2025 was among the weakest in recent years, the firm sees strong upside potential ahead. It expects the Nifty 50 to rise by 12% to around 29,000 by the end of 2026.
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Kotak Securities stated that the market remained in a consolidation phase throughout 2025. However, it anticipates a sharp rebound next year, setting a Nifty target of 32,032, indicating a potential upside of 23.5% from current levels.
Axis Securities offered a more cautious outlook, predicting moderate growth. According to its estimates, the Nifty could reach 28,100 by the end of 2026, reflecting an 8% increase. Overall, forecasts from multiple brokerage houses suggest that 2026 could prove significantly more rewarding for investors compared to 2025.