Nifty 50 target: Index in sweet spot? 28,000 soon? HSBC, Citi and Bernstein raise targets after sharp 13.5% recovery

Résumé détaillé

Citi raised its Nifty 50 target to 28,000, while HSBC upgraded Indian equities to overweight and Bernstein lifted its target to 26,100.

The Indian stock market continued its bullish run, with both frontline indices surging nearly 1% in Wednesday's trade, hitting an 8-month high and extending last week's phenomenal rally.

The Nifty 50 has now recovered around 13.5% from its war-induced lows, while its year-to-date losses have narrowed to just 3.35% after previously slipping into double-digit declines.

Although the Indian market's performance was relatively subdued compared with its Asian peers, most of which were trading with stronger gains, domestic equities continued to build on their recent recovery, supported by improving investor confidence and renewed buying interest.

The recovery has largely been supported by the return of overseas investors, as India becomes an increasingly attractive investment destination following the global AI-led sell-off.

Additionally, the decline in crude oil prices has helped ease inflationary pressures and improved the outlook for India's macroeconomic fundamentals. FPIs have pumped ₹53,739 crore into domestic stocks in November so far, according to NSDL data.

India’s relatively limited exposure to the AI trade had made its stocks among Asia’s worst performers. However, as the once high-flying trade begins to unravel, that weakness has quickly turned into a blessing.

The recent losses have also made Indian stocks more attractive, while better-than-expected corporate performance has helped support valuation multiples. This has given investors an opportunity to return to Dalal Street after largely overlooking the market for nearly two years in pursuit of AI-linked stocks.

The fallout in AI-linked stocks and the decline in crude oil prices have also caught the attention of global brokerages, prompting them to raise their targets for the Nifty 50.

Citi raised its valuation multiple for Indian equities to 18 times forward earnings from 17 times, arguing that a favourable combination of resilient earnings growth, softer crude oil prices, and a rotation away from crowded AI trades…

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