Nifty Prediction 2026: Brokerage firm Emkay Global has shared its market outlook for 2026, saying it sees a meaningful upside next year led by softer interest
rates, stable policy and recovery in the consumption space. The brokerage said that bulls can Nifty to 29000 by next December, while noting that valuations of Indian markets are likely to stay elevated. In its India Strategy 2026 outlook, the brokerage said that GST cuts by the government and improvement in affordability are expected to boost aid consumption and support overall economic momentum. On the rate cuts, it said that RBI is likely to take measures to revive retail lending even as near-term market volatility may persist.
Cconsumption Recovery, Rupee Depreciation
According to Emkay, a normal monsoon in 2026 will help incomes and spur a consumption recovery. An additional boost to the consumption space is anticipated from further tax cuts in the next Union Budget.
On the depreciation of Indian rupee, it said that the pressure on the local unit may continue to affect the stock market.
India-US Trade Deal
On India-US trade deal, Emkay expects the discussions to be completed within the next three to six months. Notably, the rupee is Asia's worst performer this year. The currency has fallen nearly 6 per cent against the US dollar in 2025 so far.
Looking ahead, the capex cycle is projected to normalise by 2026, Emkay said, adding that the private sector investment may remain muted for some time.
SMID Valuations
Seshadri Sen, Head of Research & Strategist at Emkay Global, said that valuations of small and midcaps may appear elevated at first glance, but they remain largely justified given the significant differences in sector composition. Within the segment, the brokerage said that it doesn't see better earnings quality coming through.
For 2026, Emkay has maintained an Overweight stance on discretionary, industrials, healthcare and materials for 2026. It said that discretionary consumption will remains its strongest theme, supported by GST cuts and firm urban demand. The brokerage has maintained Underweight stance on on financials, staples, IT and telecom. Emkay mentioned that large banks continue to face valuation pressures amid rising competition from PSU lenders and NBFCs.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
