Nomura expects benchmark Nifty 50 to climb to 29,300 by end-2026, about 12 per cent above current levels, as cyclical economic momentum and earnings growth regain traction under supportive policies, its analyst Saion Mukherjee said.
Mukherjee said in a note on Tuesday that the brokerage dropped its valuation concerns in May 2025 after markets steadied from the tariff-driven selloff triggered by the U.S. hike in import duties.
Calmer geopolitics, a firmer macro backdrop and signs of a cyclical pickup now reinforce the case for higher valuations, he added.
The research firm’s outlook echoes similar 2026 calls from HSBC and J.P.Morgan, coming as the Nifty 50 and Sensex hit record highs last week for the first time in 14 months supported by improving earnings, steadier valuations, resilient domestic inflows and firm economic growth.
The brokerage said India’s relative underperformance over the past year has helped valuation premiums normalise, with strong local flows anchoring market stability.
It expects policy support aimed at growth, self-reliance and structural reforms to keep the medium-term outlook constructive.
Nomura warned, however, that narrative-driven stocks with stretched valuations may deliver no returns, urging a selective, bottom-up approach.
It favours commercial vehicles, pharma, IT and non-bank lenders and is overweight on financials, consumer discretionary, real estate, internet, cement, telecom and manufacturing. It remains cautious on consumer staples, infrastructure, capital goods and healthcare services, and neutral on autos.
Top picks for 2026 include ICICI Bank, Axis Bank , Infosys, UltraTech Cement, Mahindra & Mahindra and Bajaj Finance. The firm also flagged global threats from rising risk premiums, commodity spikes and geopolitical or macro shocks.
Published on December 2, 2025
