Nifty 50 could hit 29,000 in 2026, predicts Emkay Global
30 Dec 2025

The Indian stock market is poised for a strong performance in 2026, with the Nifty 50 index expected to hit the milestone of 29,000 over the next year.

This prediction comes from Seshadri Sen, Head of Research and Strategy at Emkay Global Financial Services.

The forecast suggests a period of growth for investors as they navigate through short-term volatility due to currency stress and trade-related uncertainties.

Nifty 50's current performance and future expectations
Market analysis

So far in 2025, the Nifty 50 index has gained some 10% and is currently trading at around 25,942.

The Nifty Midcap 100 has also seen a gain of about 5%. However, the Nifty Smallcap index has witnessed a decline of over 6%.

Despite these fluctuations, Sen remains optimistic about mid and small-cap stocks outperforming in the next one to two years with disciplined stock picking strategies.

Factors impacting India's market performance
Market challenges

Sen attributed the domestic market's struggle to sustain a bull trend in 2025 to two major factors.

The first was twin tightening—fiscal and monetary—through calendar year 2024, which had a lagged effect on growth and corporate earnings.

The second factor was global headwinds, such as high US tariffs weakening the rupee and drawing capital toward developed markets like the US.

Nifty 50's 12-month target and market outlook
Future projections

Sen has set a 12-month target for the Nifty at around 29,000, implying low double-digit returns.

He believes that while short-term volatility may continue due to currency stress and trade-related uncertainties, any meaningful correction should be viewed as a buying opportunity.

This is backed by improving earnings visibility and macro stability indicators in the Indian economy.

Mid and small-caps expected to outperform
Stock performance

Sen expects mid and small-cap stocks (SMIDs) to outperform over a one- to two-year horizon, despite near-term volatility.

He noted that SMIDs are delivering higher earnings growth, improving balance sheets, and gaining share over large companies in several sectors such as financials, IT services, healthcare (non-pharma), EMS and platform businesses.

A disciplined bottom-up approach to stock picking is critical for investors looking for stability while generating alpha from SMIDs.

Delayed India-US trade deal and its impact
Trade implications

Sen also spoke about the implications of a delayed India-US trade deal on markets.

He said that while it will keep pressure on the rupee, making foreign investors cautious and adding to short-term vulnerability, it is not structurally negative.

The deal is seen as inevitable and important for both countries, with its eventual conclusion likely to provide a major boost to currency stability and foreign investment inflows.

Indicators of corporate earnings revival from Q3
Earnings outlook

Sen highlighted several indicators suggesting that corporate earnings are poised for a revival.

He noted that FY27 earnings estimates have started moving upwards after a prolonged period of downgrades, with the share of earnings upgrades increasing and downgrades steadily declining.

Credit growth also appears to be bottoming out, particularly in retail and unsecured lending, which should support consumption and business activity in India.