Nifty 50's Volatile Outlook

According to a report by BofA Securities, the Nifty 50 could experience significant fluctuations, ranging from 11% below to 4% above its year-end target of 25,000. This volatility is attributed to a host of uncertainties including possible US trade tariffs on Indian goods, a shaky US economic outlook, and upcoming elections in six major Indian states.

Market Sentiments and Earnings Expectations

BofA Securities maintains its year-end target for the Nifty at 25,000 but warns of potential swings due to emerging developments. The firm anticipates Nifty earnings to grow by 7% in FY26 and 11% in FY27, below market expectations. Each earnings season could trigger short-term corrections rather than sustained rallies.

Positive Indicators Amid Challenges

Despite the challenges, timely legislative and fiscal reforms could uplift market sentiment. S&P Global Ratings has upgraded India’s sovereign credit rating to 'BBB' with a stable outlook, citing robust growth and fiscal discipline. The impact of US tariffs on India is deemed manageable, with domestic consumption driving 60% of the country’s economic growth.