Axis Securities expects Nifty 50 to rise up to 13% to hit 29,500 by Dec 2026 in bull case: Check key triggers

Benchmark index Nifty 50 will likely hit 28,100 in December 2026, according to Axis Securities' base case for the equity benchmark  and its bull case expectation is 29,500. The domestic brokerage, in its latest note, has also mentioned key triggers to strong upside and downside potentials in its respective bull and bear cases for the Indian benchmark index.

Nifty 50 on December 1 hit an all-time high of 26,325.80, before seeing some profit booking. The index closed more than 143 points lower (0.55 percent down) at 26,032.20 on December 2.

Axis Securities noted that Nifty 50 has rallied more than 1,500 points since October this year. This was driven by better-than-expected earnings performance in the first half of FY26, hopes for US tariffs reducing to 15 percent for India, early signs of consumption pickup, stable currency, relatively better valuations when compared to other emerging markets and positive sentiment.

"In the coming weeks, the market will closely monitor developments in the India-USA negotiations on tariffs, RBI monetary policy, US Fed meeting outcomes, and other high-frequency indicators," the brokerage said.

Axis, however, cautioned that while the Indian economy is on the verge of a cyclical recovery, global challenges are likely to persist. "Despite external risks, India’s domestic growth trajectory remains intact, with key macroeconomic factors supporting a stronger FY26 compared to FY25," it added.

US President Donald Trump’s high tariffs on Indian imports to the country continues to stand, and the resolution is not on the cards till now. Axis Securities said that the market would remain vigilant on developments around tariff negotiations.

"Along with the geopolitical situation, the substance of the earnings from Q3 FY26 onwards remains critical for the market, as consumption has shown an early sign of pickup, but broad-based earnings and substance remain to be seen by the market. However, the base is building for the better second half, and that will likely drive the market performance further," it added.

Base case: Nifty hits 28,100 by December 2026

Axis Securities believes that the Indian economy remains well-positioned for growth, serving as a stable haven amidst global economic volatility. It remains confident in India's long-term growth story, supported by its favourable economic structure, rising capex, and the consumption boost from the recent Union Budget and GST 2.0 reforms.

The brokerage foresees Nifty earnings to post excellent growth of 13 percent CAGR over FY23-28. Financials will remain the biggest contributors for FY26/27 earnings, it said. However, trade policy uncertainty, rupee depreciation, and delay in earning revival remain key risks to near-term market multiples.

“In our base case, we roll over the Nifty target to Dec’26 to 28,100 by valuing it at 20x on Dec’27 earnings. Based on the expectations of the earnings upgrade starting from Q3FY26 onwards, we see upside risk to our target,” it said. The base case target marks a nearly 8 percent rise from current level.

The current level of India's VIX is below its long-term average, indicating that the market is currently in a neutral zone (neither panic nor exuberance), Axis Securities highlighted, adding that the medium to long-term outlook for the overall market remains positive. However, it noted that there might be some volatility in the short run.

The brokerage advised investors to maintain good liquidity (10-15 percent) to use any dips in a phased manner and build a position in high-quality companies (where the earnings visibility is quite high) with an investment horizon of 12-18 months.

Bull case: Nifty hits 29,500 in December 2026

Axis Securities expects Nifty 50 to jump more than 13 percent from current levels to hit 29,500 by December 2026. "Our bull case assumption is based on the Goldilocks scenario, which assumes an overall reduction in volatility and a successful soft landing in the US market. The market is keenly watching the global growth scenario in 2026 under Trump's presidency, in which uncertainty related to tariffs is likely to be reduced compared to 2025. Furthermore, private capex, which has been sluggish for the last several years, is expected to receive a much-needed boost in the upcoming years, with the expectation of policy continuity," the brokerage said.

"Backed by expectations of political stability, policy continuity, fiscal prudence, an improving private Capex cycle, rural revival, and a soft landing in the US market, Nifty earnings are likely to grow ever higher than 13%+ CAGR for FY23-28. This would augur well for capital inflows into emerging markets (EMs) and increase the market multiples in the domestic market," it added.

Bear case: Nifty drops to 24,000 in December 2026

As part of its bear case, Axis Securities sees Nifty 50 dropping nearly 8 percent to 24,000 by December 2026, assuming that the market will trade at above-average valuations, led by the likelihood of a policy shift in the Trump regime. Additionally, it presumes that inflation will continue to pose challenges in the developed world.

"The global market has not seen such elevated interest rates in the recent past. Hence, the chances of going wrong have increased significantly. Nonetheless, the direction of currency, oil prices, and global trade developments will likely put pressure on export-oriented growth in the remaining part of FY26," it said.

"Moreover, the question mark on the global growth has significantly increased after the imposition of Trump tariffs. These developments will likely bring down the market multiple in the near term. However, based on the recent developments, the chances of this scenario playing out have reduced significantly," it added.

Axis Securities top picks:

Axis Securities recommended a list of 15 stocks for investors to invest in. These include HDFC Bank, Bajaj Finance, Bharti Airtel, Avenue Supermarts, State Bank of India (SBI), Max Healthcare, Kirloskar Brothers, Kalpataru Projects, APL Apollo Tubes, Mahanagar Gas, Inox wind, Prestige Estates, Ujjivan Small Finance  Bank, Chalet Hotels and Sansera Engineering.

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