Goldman Sachs forecasts Nifty to 26,500

Goldman Sachs said on Tuesday it expects the Nifty index to recover to 26,500, signalling roughly 9.5% upside from current levels. The bank flagged lower commodity prices, a stabilised currency and healthy second-quarter earnings as the drivers behind the call.

The firm warned that renewed tensions in West Asia could produce near-term volatility but said ultra-light foreign investor positioning leaves room for flows to return. "Foreign selling is likely over, and sentiment should turn incrementally favourable on improved domestic outlook and ultra-light foreign positioning," said Goldman in a client note.

Goldman Sachs sector recommendations

Goldman Sachs recommended going long on banks, tourism and energy refiners, and favours large-caps over mid-caps. The bank prefers power utilities over agriculture stocks and companies focused on the domestic economy rather than exporters.

The brokerage listed top large-cap bets as Reliance Industries, HDFC Bank, Adani Power, Adani Enterprises, Kotak Mahindra Bank, NTPC, Hindustan Aeronautics, Eternal (Zomato), Power Grid of India, Adani Green Energy, InterGlobe Aviation (IndiGo), HDFC Life Insurance, Indian Hotels, Mazagon Dock Shipbuilders, and MakeMyTrip.

Investors will watch whether foreign flows resume and whether Q2 earnings confirm the bank's thesis; market participants should reassess positioning by July 28, 2026, when near-term flow trends and early quarterly results should be clearer.