Nomura Cuts Nifty 50 Target for December 2026 to 24,900 Amid West Asia War Risks

Nomura Cuts Nifty 50 Target for December 2026 to 24,900 Amid West Asia War Risks​

Nomura has lowered its target for the Nifty 50 index for December 2026, citing rising risks to corporate earnings due to elevated oil prices linked to the ongoing conflict in West Asia.

Nomura Sees Earnings Risk if Oil Prices Stay Elevated​

In a note dated Monday, March 16, the brokerage said it now expects the Nifty 50 to reach 24,900 by December 2026, down from its earlier target of 29,300.

Nomura warned that consensus earnings estimates for the financial year 2027 could face a downside risk of 10% to 15% if oil prices remain high for an extended period.

Its base case scenario assumes:

• A 7.5% reduction in consensus earnings estimates
• A price-to-earnings multiple of 18.5x, reduced from the earlier 21x

Target Range for Nifty Set Between 21,000 and 29,100​

Nomura has outlined a broad target range of 21,000 to 29,100 for December 2026.

The upper end of the range assumes a swift de-escalation of geopolitical tensions, which could stabilise energy markets and improve investor sentiment.

Market Correction Deepens Amid Global Uncertainty​

Indian equities have already seen a sharp correction.

According to the brokerage:

• The market has declined about 8% over the past two weeks
• The Nifty 50 and Nifty Bank indices are down 13% from their record highs

Nomura noted that declines of this magnitude have previously occurred only during major global disruptions such as the COVID-19 pandemic in 2020 and the start of the Russia-Ukraine war in 2022.

The brokerage also cautioned that an additional 5% downside in the near term remains possible, particularly as foreign institutional investor (FII) flows could remain weak.

It added that small-cap and mid-cap stocks may be more vulnerable during this phase of market volatility.

Long-Term Buying Opportunity Possible​

Despite the near-term risks, Nomura said a deeper correction could offer an opportunity for long-term investors.

The brokerage stated that a fall beyond 5% from current levels may present attractive entry points for investors with a longer investment horizon.

Sectors Likely to Outperform​

Nomura expects several defensive and energy-linked sectors to perform relatively better during the current market environment.

These include:

• Utilities
• Coal
• Oil producers
• Healthcare
• Pharmaceuticals
• Consumer staples
• Telecom

However, the brokerage noted that valuations in healthcare services and consumer staples remain elevated despite its positive fundamental outlook for these sectors.

AI Concerns Seen as Overstated​

Nomura also addressed concerns related to artificial intelligence, stating that the impact on markets is premature and overstated.

Its base case scenario assumes that geopolitical tensions will eventually ease, which would help restore energy supply stability and bring oil prices lower over time.