New Delhi, October 19, 2026 (Yes Punjab News)
The Nifty 50 is likely to reach 25,000 by December 2026, with geopolitical tensions, elevated crude oil prices and subdued earnings growth clouding the outlook for Indian equities, according to a report by brokerage Bernstein.
The brokerage has lowered its earlier target of 26,000, citing mounting macroeconomic pressures, supply-chain challenges and a lack of meaningful upgrades to corporate earnings estimates.
The revised target implies an upside of around 8.1 per cent from the benchmark’s current level. Bernstein’s projection assumes a valuation multiple of 18 times estimated earnings for the 2027-28 financial year, with earnings expected to grow approximately 9 per cent over FY27.
However, the brokerage cautioned that even a 4-5 per cent market rally could push Indian equities beyond their current valuation comfort zone, bringing valuations closer to recent averages of around 18.2 times forward earnings.
On foreign investment, Bernstein said a reduction in long-term capital gains (LTCG) tax could benefit India’s capital-constrained economy but would not, by itself, generate sustained foreign institutional investor (FII) inflows. A brief rally following a tax cut could instead provide investors an opportunity to sell their holdings, the report warned.
Finance Minister Nirmala Sitharaman has indicated the government’s willingness to consider removing LTCG tax during consultations ahead of the upcoming Union Budget.
The brokerage also sees limited near-term gains for India from a potential pause in global artificial intelligence-related investments, noting that Indian equities lack the return profile and investment opportunities currently attracting international capital to the AI sector.
Policy support may also weaken as the benefits of goods and services tax-related measures fade amid base effects and rising prices. Weaker monsoons and significantly lower reservoir levels pose additional risks.
Firming bond yields, persistent commodity-price pressures, uncertainty over a US trade agreement and continued concerns surrounding Russian oil sourcing, despite waivers, further complicate the outlook. Bernstein expects the strong macroeconomic growth recorded in the previous quarter to be difficult to replicate under these conditions.
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