Market Outlook 2026: After touching a record closing high on November 20, the Nifty 50 pulled back on Friday but continued to eye peak levels. The index slipped nearly 0.7% to an intraday low of 26,055.95 on November 21 as volatility picked up across global markets.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, noted that “market volatility has spiked up,” adding that the sharp fall in the Nasdaq—the key barometer of the AI trade—is a sign that more turbulence may follow.

He cautioned retail investors against speculative trading, especially in newly-listed stocks, calling it “excessive” and risky. According to him, the ideal strategy is to buy high-quality, fairly valued stocks during declines and stay patient.

A key positive development has been the return of foreign portfolio investors after three months of outflows. FPIs turned net buyers in October, supported by stronger earnings expectations, lower consumption taxes and progress in India–US trade negotiations. They have added nearly USD 1.3 billion since the start of last month.

On the technical front, Anand James, Chief Market Strategist at Geojit Investments, said the breakout above the recent trading range strengthens the outlook for 26,550, although the reversal from the upper Bollinger band indicates “upswings may be limited.” A fall below 26,237 or 26,160 could shift bias towards 26,028–25,984.

Global Brokerage Forecasts for 2026

As Nifty trades near record highs, global brokerages have begun outlining their projections for 2026, highlighting a mix of optimism, earnings recovery and supportive macro trends.

Here’s what they are saying:

HSBC Sees Sensex at 94,000 by 2026

HSBC projected that Indian equities could deliver around 10% annual returns through 2026, assigning a year-end 2026 Sensex target of 94,000. It highlighted that valuations have turned more reasonable after a long consolidation phase and that earnings momentum is reviving.

The brokerage expected bank margins to improve as interest rates ease and lending activity strengthens. Consumer-facing sectors, including autos, are also expected to gain from lower interest costs and cuts in goods and services tax. HSBC upgraded Indian equities to overweight in September, becoming one of the earliest major global firms to turn positive on Asia’s third-largest economy.

Morgan Stanley’s Bull Case Puts Sensex at 1,07,000

Morgan Stanley maintained a base-case target of 95,000 for the Sensex by December 2026, while its bull-case scenario places the index at 1,07,000. The brokerage said India is positioned for a broad market revival after a year of underperformance.

It expects India to “regain its mojo” in 2026 as the market transitions from stock-specific moves to a macro-driven cycle supported by falling rates, stronger credit trends and policy support. Morgan Stanley noted that foreign investor positioning is currently among the “lightest in history,” creating substantial potential for catch-up flows. Domestic inflows, meanwhile, remain strong and continue to anchor market resilience.

Goldman Sachs Turns Overweight Again

Reversing its October 2024 downgrade, Goldman Sachs upgraded Indian equities to overweight with a year-end 2026 Nifty target of 29,000. The brokerage said India has likely completed a year-long earnings downgrade cycle and is now entering a period of renewed momentum.

Goldman Sachs expected upgrades across financials, consumer companies, autos, defence manufacturers, oil marketing companies and telecom firms. It remained cautious on export-heavy sectors such as IT, pharma, industrials and chemicals due to earnings pressures and softer global demand.

UBS Stays Underweight Despite Macro Tailwinds

UBS retained its underweight stance, arguing that valuations still look expensive relative to fundamentals. It cautioned that while retail flows remain supportive, foreign selling and rising corporate fundraising require careful monitoring. UBS assumed the India–US trade deal would be finalised by late 2025, with reciprocal tariffs settling near 15%—aligned with other Asian peers.

Franklin Templeton Expects Stronger Growth by FY27

Franklin Templeton forecasted modest single-digit earnings growth in FY26 but anticipated a sharper rebound of 16–17% in FY27, led primarily by financials. It described overall fundamentals as healthy, and valuations across sectors as fair, though deep bargains remain limited.

Sectors and Stocks to Watch Through 2026

Morgan Stanley expected domestic demand-linked sectors—consumer discretionary, industrials and financials—to lead the next phase of the cycle. Its 2026 focus list includes Maruti Suzuki, Trent, Titan, Varun Beverages, Reliance Industries, Bajaj Finance, ICICI Bank, Larsen & Toubro, UltraTech Cement and Coforge. It trimmed exposure to energy, materials, healthcare and utilities.

Goldman Sachs said September-quarter earnings exceeded expectations and forecasted that financials, consumer staples, durables, autos, defence, OMCs, internet and telecom firms would drive the ongoing recovery.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.