After delivering muted returns in 2025, investors are looking hopefully towards Indian stock markets in 2026. Here’s a consolidated list of what global and domestic brokerages expect for the Indian benchmark indices next year.
The benchmark indices recorded sharp losses earlier this year, triggered by Donald Trump's tariffs, erasing the previous year's gains during the first half.Later, towards the end of the year, Sensex and Nifty soared to fresh lifetime highs, breaking previous year's records. The indices took around 14 months to return back to the levels seen during the previous year.
Sensex has gained more than 6,000 points (or 8 percent), while Nifty rose over 2,000 points (or 9 percent) in 2025 so far. Are the Indian benchmark indices heading towards a breakout or another year of consolidation in 2026?
Morgan Stanley:
Indian equities may be poised for their strongest phase in years, with Morgan Stanley projecting that Sensex could climb to 1,07,000 by December 2026 in its bull case, implying a rise of 26 percent from December 30's closing level of 84,675.08.
As part of its base case, Morgan Stanley sees Sensex rising over 12 percent to 95,000 by December 2026.
The global brokerage said that after India’s sharp underperformance in 2025, the market is positioned for a broad recovery driven by macro tailwinds, policy easing and a renewed earnings cycle.India is set to "regain its mojo" in 2026, shifting from a stock-picking market to a macro-driven trade, it said in an investors’ note. Foreign investors’ positioning is "the lightest in history", relative valuations have normalised, and domestic fund flows remain structurally strong - a combination that offers the bedrock for a multi-year rebound in equities, Morgan Stanley added.
In its bear case however, Morgan Stanley sees Sensex falling 10 percent to 76,000 by end-2026.
Nomura:
Nomura has struck a cautiously constructive tone on Indian equities for 2026, projecting a Nifty target of 29,300 (nearly 13 percent rise from current level), supported by calmer geopolitics, resilient macro indicators and a cyclical earnings recovery. The brokerage said India’s valuation premium has now normalised after 14 months of underperformance versus global markets, offering a more reasonable entry point for long-term investors while laying the foundation for a broader rebound in equities.
Goldman Sachs:
Earlier last month, global investment bank Goldman Sachs upgraded Indian equities to ‘Overweight’, reversing its October 2024 downgrade after what it described as India’s worst relative underperformance in two decades. However, the reversal rests not merely on the prospect of catch-up after a year of heavy foreign outflows and earnings downgrades, but also on renewed macro-economic and corporate strength.
India, the laggard of emerging markets in 2025, is now likely to re-emerge as one of the most resilient growth stories, with Nifty 50 expected to rise around 12 percent to hit 29,000 by end-2026.
Kotak Securities:
After remaining range-bound in 2025, Kotak Securities sees markets rising in 2026 as the earnings outlook has strengthened amid resolute government action. The domestic brokerage said that it expects Nifty 50 to rise 23.5 percent from current level to hit 32,032 by the end of the next year in its bull case.
In its base case, Kotak sees Nifty 50 rising over 12 percent to 29,120 in December 2026. However, as part of its bear case, the brokerage sees the index falling over 1 percent to 26,208.
Axis Securities:
Benchmark index Nifty 50 will likely rise over 8 percent to hit 28,100 in December 2026, according to Axis Securities' base case for the equity benchmark. Its bull case expectation for the index is 29,500 (14 percent rise), while bear case estimate is 24,000 (7 percent fall).
"In the coming weeks, the market will closely monitor developments in the India-USA negotiations on tariffs, RBI monetary policy, US Fed meeting outcomes, and other high-frequency indicators," the brokerage said.
Emkay Global Financial Services:
Emkay Global Financial Services has projected the Nifty to rise around 12 percent to 29,000 by December 2026, citing a likely pick-up in discretionary consumption, liquidity support from the Reserve Bank of India and expectations of an India-US trade agreement.
Emkay has maintained an Overweight stance on Discretionary, Industrials, Healthcare and Materials for 2026, pointing to improving demand indicators and steady earnings visibility. It said discretionary consumption remains its strongest theme, supported by GST-led price cuts, firmer urban demand and early signs of improvement in hiring.
The brokerage remains Underweight on Financials, Staples, IT and Telecom. It noted that large banks continue to face valuation pressures amid rising competition from PSU lenders and NBFCs. The IT sector, while more reasonably valued, is expected to see a sustained recovery only by CY26 as global technology spending stabilises.
HSBC:
Global investment bank HSBC on September 24 upgraded Indian equities to "overweight" from "neutral", and said the shares are looking attractive on a regional basis after recent underperformance.
HSBC said it expects Sensex to rise around 11 percent to 94,000 by end of 2026. The upgrade came eight months after it had downgraded Indian equities in January citing slowdown in growth amidst high valuations, which limited the upside potential.
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As of late December 2025, several top-tier global and domestic brokerages have released their "Outlook 2026" reports. After a relatively muted 2025, the consensus is that India is set to "regain its mojo," with bull-case targets suggesting record highs for both the Nifty and Sensex.
The Sensex target of 1,07,000 and Nifty target of 32,000 represent the most optimistic scenarios from major firms like Morgan Stanley and Kotak Securities.
2026-End Brokerage Targets: Bull vs. Base Case
| Brokerage | Nifty Target (Base/Bull) | Sensex Target (Base/Bull) | Probability / Outlook |
| Morgan Stanley | — | 95,000 / 1,07,000 | Bull case assumes oil <$65 & global trade recovery. |
| Kotak Securities | 29,120 / 32,032 | — | Driven by earnings recovery and govt action. |
| Goldman Sachs | 29,000 | — | Upgraded to 'Overweight' due to macro stability. |
| ICICI Securities | 29,500 | 98,500 | Cites 8th Pay Commission as a consumption trigger. |
| Axis Securities | 28,100 / 29,500 | — | Cautious but constructive on mid-caps. |
| HSBC | — | 94,000 | Expects mid-teens earnings growth in FY27. |
Key Drivers for the Bull Case
For the Nifty to hit 32,000 and Sensex to reach 1,07,000, analysts highlight four critical "triggers" that must align:
The Consumption Boost: The payout from the 8th Pay Commission (estimated at ₹2 lakh crore) is expected to fuel a massive surge in discretionary spending, particularly in the auto and real estate sectors.
Monetary Easing: With inflation stabilizing around 2%, the RBI has already cut rates by 125 bps in 2025, with more cuts projected for early 2026 to stimulate credit growth.
Earnings Cycle: Corporate earnings are expected to compound at 17–19% annually through FY28, shifting the market from a "stock-picking" phase to a broader "macro-driven" rally.
Foreign Inflows (FIIs): After selling nearly $30 billion in 2025, foreign investor positioning is at "historical lows." A reversal in this trend could provide the liquidity needed for a 20%+ rally.
What are the risks?
Brokerages also maintain a "Bear Case" (e.g., Sensex at 76,000) if:
Crude Oil spikes above $100/barrel.
US-India Trade Relations sour or tariffs increase unexpectedly.
US Recession triggers a global slowdown.
Investor Note: As of December 30, 2025, the Nifty is hovering around the 26,100 mark, meaning the bull-case target of 32,000 implies an upside of roughly 22-23% over the next 12 months.
Would you like me to look into specific stock recommendations from these reports, such as the top picks for the "Consumption" or "Digital India" themes in 2026?
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