India’s benchmark index Nifty is projected to reach 29,150 by December 2026, up from the earlier estimate of 28,500, indicating a 12% annual return for CY26, as per a report by Geojit Investments Limited.
The report highlights a positive outlook on Indian equities due to favorable factors such as benign inflation, an improving demand environment, and supportive fiscal and monetary measures that are expected to boost the domestic earnings cycle.
Despite the optimistic forecast, the report cautions about challenges like high valuations, foreign institutional investor outflows, and the impact of elevated US inflation and interest-rate trends.
The firm suggests higher equity allocations, recommending 60% in large-caps, 15% in midcaps, and 10% in small-caps, driven by expectations of reduced geopolitical risks and moderating tariff disparities in 2026.
According to the report, the US is anticipated to shift away from aggressive trade policies towards comprehensive trade deals with multiple countries, especially in the lead-up to the 2026 midterm elections.
It also predicts a moderation in global risks in 2026, with a potential reversal in FII outflows contingent on global rate cuts, a weaker US dollar, and reduced trade tensions, while noting that gold prices may have peaked in the medium term.
