Citi predicts Nifty to reach 26000 by year-end as market outlook improves
HomeMarket NewsCiti predicts Nifty to reach 26000 by year-end as market outlook improves
India’s stock market outlook has improved, said Surendra Goyal, Head of India Research at Citi, predicting that Nifty could reach 26,000 by the end of the year. According to Citi, lower stock valuations, strong growth in key sectors, and supportive policies from the Reserve Bank of India (RBI) will help boost the market.
Goyal explained that valuations have become more attractive, making Indian stocks a compelling opportunity for investors. He stated that stable earnings will be key to sustaining market performance.
Citi expects financials, telecom, healthcare, and cement to benefit from domestic demand recovery and policy support. “Beyond that, there are some specific themes we like. For example, the domestic travel market remains strong, and companies in this space should continue to perform well. In contrast, we remain relatively cautious on IT services and consumption beyond a few pockets,” Goyal added.
Foreign investor sentiment is also improving. Despite recent outflows, India’s growing weight in emerging market indices is making it harder for global investors to ignore. “India’s weightage in EM indices has increased substantially from 8-9% a few years ago to around 17% today,” Goyal said.
US Fed likely to cut rates two to three times this year, says Manulife’s Marc Franklin
Samiran Chakraborty, Chief Economist-India at Citi, said RBI’s policy stance is expected to remain supportive, with Citi forecasting at least 50 basis points of rate cuts this year, even if the US Federal Reserve does not move. “India’s capital flows are more sensitive to growth than interest rate differentials with the US,” he said.
Citi has factored in the potential impact of US-India tariff discussions as a minor downside risk, estimating that tariffs could reduce gross domestic product (GDP) growth by 0.2%.
RBI’s forex swap, bond purchase to ease liquidity and lower borrowing costs
While the overall outlook remains strong, some concerns persist. Geopolitical risks and uncertainties around private investment could weigh on sentiment in the near term.
Kunal Shah, Director-India Banks & Financials at Citi, said that while near-term uncertainties remain, especially in banking, valuations have adjusted to reflect potential risks.
For the entire interview, watch the accompanying video
(Edited by : Unnikrishnan)
