Brokerage turns bullish on Nifty, sees 12% upside

A major brokerage turned constructive on the Nifty after two years, forecasting 12% upside to 26,200 by December 2026 and cautioning on small and midcap stocks.

Reaction pending.

Nifty 26,200 by December 2026 The brokerage said five of eight earlier risks it had flagged have played out, reducing one layer of downside pressure but leaving three active concerns: elevated primary market issuance, the path of US Federal Reserve policy and structural disruption from artificial intelligence. The firm framed its view as a preference for large-cap leadership while smaller listed companies face greater liquidity and valuation risk.

The brokerage said it was turning cautious on small- and midcaps even as it upgraded the benchmark, citing index composition and earnings visibility as reasons large-cap names can better absorb macro shocks. It noted primary issuance could divert investor demand away from secondary markets and that tighter US policy would raise the hurdle rate for risk assets.

The brokerage said the call implies investor flows may rotate back into benchmark stocks, supporting headline valuations, but warned that heavy new supply or renewed global rate pressure would reverse that pattern. By December 31, 2026, the brokerage expects the Nifty at 26,200; markets will watch scheduled primary issuances in Q4 and US policy signals through the remainder of the year.