For investors positioning for 2026, Nomura recommends a bottom-up, selective approach -- avoiding narrative-driven, richly valued pockets while increasing exposure to underperforming exporters and exercising caution in areas with heavier government intervention.

Nomura sets Nifty target at 29,300 for end-2026, asks investors to stay selective as valuations cool

Nomura Forecasts 12% Upside for Indian Equities in 2026

Japanese brokerage firm Nomura has released a cautiously optimistic report on Indian equities, predicting a 12 percent upside for the market in 2026. The report suggests that a Nifty target of 29,300 is achievable, supported by stable geopolitics, resilient macro indicators, and a cyclical earnings recovery.

Key Drivers of Nomura's Forecast

Calmer Geopolitics: Nomura believes that India's geopolitical environment will remain stable, reducing uncertainty and attracting foreign investment.
Resilient Macro Indicators: The report notes that India's macroeconomic indicators, such as GDP growth, remain strong, supporting the market's upward trajectory.
Cyclical Earnings Recovery: Nomura expects corporate earnings to rebound to low double-digit growth in FY26, driven by strong recoveries in commodity-linked sectors.

Recent Market Performance

Benchmark indices NSE Nifty 50 and BSE Sensex have hit fresh all-time highs, climbing above 26,300 and 86,100, respectively. The Bank Nifty also jumped above 60,000 for the first time ever.

Domestic Inflows Continue to Support the Market

Nomura's report highlights that domestic inflows continue to anchor the market, with equity allocations steady at 13 percent of gross financial savings in FY25. Primary issuances have absorbed 78 percent of that liquidity without destabilising sentiment.

Key Recommendations for Investors

Bottom-Up, Selective Approach: Nomura recommends a bottom-up, selective approach to investing, avoiding richly valued sectors and increasing exposure to underperforming exporters.
Bullish Sectors: The brokerage is bullish on financials, pharmaceuticals, IT services, consumer discretionary, real estate, internet, cement, telecom, and manufacturing.
Neutral Sectors: Nomura is neutral on autos, oil & gas, and metals.
Cautious Sectors: The brokerage is cautious on consumer staples, infrastructure, capital goods, and healthcare services.

Global Brokerages also Positive on India

Nomura's forecast aligns with the increasingly optimistic tone from global brokerages, including Morgan Stanley and Goldman Sachs. Morgan Stanley projected the Sensex to reach 1,07,000 by December 2026, while Goldman Sachs upgraded India to 'Overweight', forecasting the Nifty 50 at 29,000 by end-2026.