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Nomura expects India's Nifty 50 to rise to 29,300 by the end of 2026, reflecting a 12% increase from current levels, driven by cyclical economic growth and supportive policies. The brokerage noted improved market stability after a tariff-driven selloff in mid-2025 and cited stronger macro conditions and calmer geopolitics. It expects policy measures focused on growth and structural reforms to sustain a positive medium-term outlook. Nomura favors selective sectors such as financials, IT, pharma, real estate, and manufacturing, while cautioning against narrative-driven, overvalued stocks.
Nomura has projected that India's benchmark Nifty 50 could reach 29,300 by the end of 2026, representing roughly a 12% increase from current levels, driven by cyclical economic momentum and earnings growth under supportive policies, according to analyst Saion Mukherjee. The brokerage noted that it had eased valuation concerns in May 2025 after markets stabilized following a tariff-driven selloff caused by U.S. import duty hikes. Advertisement
Mukherjee highlighted that calmer geopolitics, a stronger macroeconomic backdrop, and early signs of a cyclical pickup now support higher valuations. Nomura's outlook aligns with similar 2026 projections from HSBC and J.P. Morgan. The Nifty 50 and Sensex recently reached record highs for the first time in over a year, supported by improving earnings, stable valuations, resilient domestic inflows, and solid economic growth.
According to Nomura, India's market underperformance over the past year has helped normalize valuation premiums, with strong local inflows providing market stability. The brokerage expects policy measures focused on growth, self-reliance, and structural reforms to maintain a constructive medium-term outlook.
However, it cautioned that stocks driven primarily by market narratives with already high valuations may not deliver returns, emphasizing a selective, bottom-up approach. Nomura favors sectors such as commercial vehicles, pharmaceuticals, IT, and non-bank lenders. It is overweight on financials, consumer discretionary, real estate, internet, cement, telecom, and manufacturing, while remaining cautious on consumer staples, infrastructure, capital goods, and healthcare services, and neutral on the automobile sector.
Top stock picks for 2026 include ICICI Bank, Axis Bank, Infosys, UltraTech Cement, Mahindra & Mahindra, and Bajaj Finance. Nomura also highlighted potential global risks, including rising risk premiums, commodity price spikes, and geopolitical or macroeconomic shocks.
Source Reuters
5th Jun, 2025
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