Stock market prediction: Despite a stellar performance by the Indian economy in April to June 2026 and expectations of a better-than-previous quarterly earnings season, the key benchmark indices of the Indian stock market have delivered zero returns in the current year 2026 (CY2026). The Nifty 50 index has crashed by around 10.80% YTD; the BSE Sensex has nosedived by over 12.50%, while the Bank Nifty index has shed close to 6% YTD.
According to stock market experts, the Indian stock market is in the oversold zone, and further downside in the key benchmark indices is limited. They said that key indices are down by a sizeable margin YTD because index heavyweights such as HDFC Bank, Reliance Industries Ltd (RIL), TCS, Wipro, and Infosys have declined sharply. They said that the fast-approaching festival season, the Jio Platforms IPO expected around Dussehra, and buzz about the AI slowdown are expected to fuel RIL, banking, and IT stocks.
AI slowdown buzz
Expecting recovery in the IT and tech stocks in the last quarter of CY26, Amit Goel, Chief Global Strategist at PACE 360, said, “Due to the AI slowdown buzz, IT and tech stocks are expected to bounce back strongly as they are the most beaten-down stocks in the recent sell-off. As the weightage of IT and tech stocks is around 10% in the Nifty 50 index, this recovery would help the key benchmark pare the losses it incurred in CY26.”
Nifty outlook | HDFC Bank, RIL shares hold key
Expecting a bounce back in the HDFC Bank and RIL shares, Seema Srivastava, Senior Research Analyst at SMC Global Securities, said, “HDFC Bank and Reliance Industries together have a weightage of around 19% (10% HDFC Bank, 9% RIL). So, these two stocks hold nearly one-fifth of the net Nifty 50 weightage. The big dip visible in the Nifty 50 index in YTD can be attributed to the crash in these two Nifty heavyweights.”
Seema Srivastava of SMC Global Securities said that HDFC Bank shares crashed by around 25% YTD due to uncertainty around corporate governance following the CEO’s exit. According to media reports, the private lender has sent two probables for the HDFC Bank CEO role to the RBI, and a new CEO is expected to take charge by the end of September 2026. So, the recent rally in HDFC Bank’s share price is expected to continue further, and this is good news for bulls on Dalal Street.
Jio Platforms IPO
“Reliance Industries shares are down by more than 20% in YTD. The Nifty-Sensex heavyweight has announced to launch its Jio Platforms IPO by Dussehra. This is expected to fuel RIL shares. As the upcoming IPO is entirely fresh, the Jio Platforms IPO is expected to create buzz ahead of the IPO launch, and this buzz may continue post-listing,” Seema Srivastava of SMC Global Securities said.
Fast-approaching festival season
Expecting a big upside in the capital goods, FMCG, and consumer durable stocks as festival seasons are fast-approaching, Anuj Gupta, a SEBI-registered market expert, said, “These sectors together constitute around 7% of the Nifty 50 weightage. During the festival season, these segments outperform the market due to rising demand and new product launches. These segments rely heavily on the festival buying. Hence, we are expecting a sharp recovery in the Nifty 50 index in the last quarter of the current year.”
The SEBI-registered expert suggested that investors should bet on HUL and ITC shares. He also advised investors to look at the brewery stocks, as these companies announce their premium products ahead of the festival seasons.
Nifty 50 outlook for CY26
Speaking on the Nifty 50 target, the key benchmark index may achieve by the end of 2026, Seema Srivastava said, “I am expecting the Nifty 50 index to close around 26,000 in the bull case.”
Whether the Nifty 50 index will be able to climb to a new peak in 2026, Amit Goel of PACE 360 said, “If the AI slowdown buzz turns a reality in the beginning of November 2026, we can expect the Nifty 50 index to climb to a new peak and there is a possibility the key index touches 27,000.”
However, the PACE 360 expert said that in the event of a delayed AI slowdown, we can expect the Nifty 50 index to close above 26,000, if not climb to a new peak.
Disclaimer: This story is for educational and informational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified financial experts before making any investment decisions.
