Nifty to Hit 29,150 by 2026, Offering 12% Annual Returns: Geojit Report

The report from Geojit Investments Limited said that it had a positive outlook on Indian equities as benign inflation and an improving demand environment, aided by fiscal and monetary measures will drive a turnaround in the domestic earnings cycle.

The brokerage, however, flagged high valuations, foreign institutional investor outflows and elevated US inflation and interest‑rate trajectories as key challenges.

"Given the subdued inflation outlook, we can expect a further cut in 2026, based on data. India's financial liquidity has improved after RBI's cut in CRR by 100 bps and open market operations, upgrading the outlook for banks," the report noted.

The firm warned that stable GDP alongside low inflation could bring short‑term stagnation even as the fiscal path will remain steady amid external challenges.

The brokerage called for higher equity allocations, recommending 60 per cent in large-caps, 15 per cent in midcaps and 10 per cent in small-caps. Our positive outlook is driven by expectations of easing geopolitical risks and moderating tariff differences in 2026, the firm noted.

"The US is unlikely to sustain aggressive trade policies amid rising inflation, declining corporate profitability, job losses and especially moving to the 2026 midterm elections," it forecasted, highlighting US discussions with multiple countries for comprehensive trade deals.

It forecasted global risk to moderate in 2026, adding that "a reversal in FII outflows will largely depend on global rate easing, a weakening US dollar and a reduction in trade concerns."

Gold could have peaked in the medium term, while easing geopolitical and trade tensions in CY26 can lead to a prolonged consolidation rather than further upside, which could be positive for equity given the reverse relationship, it added.

- IANS