Indian equity markets could be headed for a significant upswing in the coming year, with leading global brokerage Nomura projecting a robust double-digit gain for the benchmark Nifty index. The firm has set a target of 29,300 for the Nifty in 2026, which implies a potential upside of nearly 13% from Tuesday's closing level of 26,032.20.
Nomura's Bullish Thesis and Top Stock Recommendations
Nomura's optimism is rooted in a combination of improving domestic and international conditions. In a client note, the brokerage stated that a positive valuation view is now supported by calmer geopolitics, stable macroeconomic indicators, and a cyclical recovery in both economic and corporate earnings growth. The firm also pointed out that the Indian market's underperformance relative to most global peers over the past 14 months has made valuations more reasonable.
Alongside the index target, Nomura released a curated list of its top stock picks for investors. The selection spans various sectors, highlighting companies expected to outperform. The recommended stocks include:
- ICICI Bank, Infosys, Bajaj Finance
- Mahindra & Mahindra, Axis Bank, Titan
- Ultratech Cement, Godrej Consumer Products
- LG Electronics, CG Power, Swiggy
- Dr Reddy's, Dixon Technologies, Alkem
- Mahindra Finance, Sona Comstar, eClerx
- Aditya Birla Real Estate and MedPlus
Global Broader Consensus and a Note of Caution
Nomura's bullish stance aligns with projections from other major global institutions. Firms like Goldman Sachs and HSBC have also recently forecasted gains of 12% and 10% for the Nifty and Sensex, respectively, in 2026, indicating a consensus on the market's positive trajectory.
However, Nomura struck a measured tone regarding foreign capital inflows. The brokerage does not anticipate a sharp rebound in Foreign Portfolio Investor (FPI) investments in the immediate future, though it expects a marginal improvement next year. It noted that FII interest is likely to see a boost if the global rally and the concentrated AI trade moderate, as India's valuation premium has now normalized to its long-term average.
Market Context and Investor Implications
The projections come at a time when the Nifty experienced a slight dip, closing down 144 points or 0.6% on Tuesday. The detailed outlook from Nomura provides a forward-looking perspective for investors navigating the volatility. The convergence of views among top brokerages on a double-digit upside for 2026 suggests underlying strength in the Indian market narrative, driven by fundamental recovery.
For market participants, the report underscores the importance of stock-specific selection in a recovering market cycle, as evidenced by Nomura's diverse list of top picks. While the overall direction appears positive, the cautious view on foreign flows reminds investors that the journey may see periods of consolidation amidst the broader upward trend.
