Will Nifty Reach 29,150 by December 2026 Delivering 12% Returns?
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Synopsis
The Nifty index is expected to hit 29,150 by December 2026, marking a significant rise from previous estimates. This forecast suggests a 12% return, driven by favorable economic conditions, despite certain challenges like high valuations and foreign outflows. Will these predictions hold true amidst global economic changes?
Key Takeaways
- Nifty expected to reach 29,150 by December 2026.
- Forecast indicates a potential return of 12% year-on-year for CY26.
- Challenges include high valuations and foreign outflows.
- Positive outlook supported by improving economic conditions.
- Recommended equity allocations include 60% in large-caps.
New Delhi, Dec 31 (NationPress) The benchmark index of India, Nifty, is projected to reach 29,150 by December 2026, an increase from the previous estimate of 28,500, indicating a possible return of 12 percent year-on-year for CY26, according to a report released on Wednesday.
The analysis from Geojit Investments Limited suggests a positive outlook for Indian equities, fueled by moderate inflation and an improving demand landscape, supported by both fiscal and monetary measures that are expected to revitalize the domestic earnings cycle.
However, the brokerage highlighted several challenges, including high valuations, outflows from foreign institutional investors, and persistent US inflation and interest-rate trends.
"With a subdued inflation outlook, further reductions could be anticipated in 2026, based on current data. The liquidity in India has improved following the RBI's reduction of CRR by 100 bps and various open market operations, which enhances the outlook for banks," the report elaborated.
The firm cautioned that a stable GDP along with low inflation could lead to short-term stagnation, despite a steady fiscal path amidst external pressures.
The brokerage advised increasing equity investments, suggesting allocations of 60 percent in large-cap stocks, 15 percent in mid-caps, and 10 percent in small-cap stocks. Their optimistic outlook is bolstered by expectations of reduced geopolitical risks and narrowing tariff disparities by 2026.
"The United States is unlikely to maintain aggressive trade policies in the face of rising inflation, declining corporate profits, job losses, and especially as it approaches the 2026 midterm elections," they predicted, emphasizing US negotiations with various nations for comprehensive trade agreements.
The forecast indicates a moderation of global risks in 2026, adding that "the reversal of FII outflows will significantly depend on global rate reductions, a weakening US dollar, and alleviated trade concerns."
Gold may have reached its peak in the medium term, while reduced geopolitical and trade tensions in CY26 could result in prolonged consolidation rather than further increases, which could positively impact equities due to the inverse relationship, the report concluded.
Point of View
It is crucial to recognize the potential for growth in the Indian equity market, as highlighted by the recent forecast for Nifty. While optimism prevails due to improving economic indicators, it is equally important to remain cautious of the challenges mentioned. An informed and balanced approach will serve investors well as we navigate the complexities of the financial landscape.
NationPress
05/01/2026
Frequently Asked Questions
What is the expected target for Nifty by December 2026?
The Nifty index is projected to reach 29,150 by December 2026.
What return can investors expect for CY26?
Investors can anticipate a return of 12 percent year-on-year for CY26.
What factors are influencing the positive outlook on Indian equities?
Benign inflation and an improving demand environment, supported by fiscal and monetary measures, are driving the positive outlook.
What challenges does the report highlight?
The report points to high valuations, foreign institutional investor outflows, and elevated US inflation and interest rates as key challenges.
What is the recommended equity allocation?
The brokerage recommends allocating 60 percent to large-caps, 15 percent to midcaps, and 10 percent to small-caps.
