Global brokerage firm Citi on Monday announced that it expects the Nifty 50 index to reach 26,000 by December this year, representing a potential 15 percent upside from current levels. Additionally, the brokerage firm has upgraded India’s market outlook from ‘Neutral’ to ‘Overweight,’ citing strong growth potential, attractive valuations, and improving consumption trends.
In its latest research report, Citi highlighted that Indian equities offer a ‘meaningful upside’ amid ‘less demanding’ valuations. The report outlines three key factors driving its positive outlook on India. Firstly, the recent tax cuts announced in the Union Budget for FY26 are expected to boost consumer spending and improve demand. Secondly, the recovery in public capital expenditure is evident, with data showing strong government spending on infrastructure and growth initiatives. Lastly, the brokerage anticipates further easing in monetary policy, with the Reserve Bank of India (RBI) having already cut rates by 25 basis points and another 50 basis points of rate cuts expected in the coming months.
Citi views India’s largely domestic-driven economy as an advantage, making it well-positioned to withstand global uncertainties, including concerns over US tariff policies. Despite continued pressure on domestic benchmark indices, Citi remains optimistic about India’s medium-term growth prospects. Over the past five trading sessions, the Sensex has shed 1,542 points, or 2 percent, while the Nifty has declined by 406 points, or 1.76 percent.
US President Donald Trump’s recent announcement of new reciprocal tariffs has shaken global markets, raising fears of trade tensions. However, Citi noted that Indian companies have limited exposure to trade with the US and China, which reduces risks from these policy changes.
