After six consecutive sessions of gains, the benchmark indices succumbed to volatility on Friday, witnessing a sharp correction due to profit booking across segments amid mixed global cues. The decline reflected caution among market participants ahead of US Fed Chair Jerome Powell’s speech at the Jackson Hole symposium.
The Sensex fell over 600 points, or 0.74 per cent, touching an intraday low of 81,393, while the Nifty 50 dropped 0.76 per cent to the day’s low of 24,893.
The muted performance of India Inc. in the June quarter, which failed to justify expensive valuations, combined with heavy selling by overseas investors, has pressured the indices. Weakening trade relations with the US, following the imposition of 50 per cent tariffs on Indian goods, further weigh on domestic equities. However, steady inflows from domestic institutional investors have capped the downside and helped the index recover from a three-month low earlier this month.
The recent six-day rally also helped the Nifty 50 reclaim the psychological 25,000 mark. The index first crossed 25,000 in August 2024 and later scaled 26,000 to register an all-time high of 26,277.
Despite declining in today’s trade, the Nifty 50 index remains nearly 5.5% away from its all-time peak of 26,277.35 hit in September last year.
With macroeconomic factors turning favourable, the question is: Can Nifty 50 reclaim record highs?
Nifty 50 Outlook: Record high on cards?
Market participants are optimistic about the Nifty reclaiming previous peaks this year. Anirudh Garg, Partner and Fund Manager at INVasset PMS, believes the Nifty could revisit its record highs if geopolitical volatility remains contained.
“We suggest Nifty could revisit its previous highs near 26,200. Strong earnings growth, sector rotation, and resilient domestic demand provide a solid foundation. Beyond the headline index, the broader market is showing signs of leadership from quality mid and small caps—especially in sectors tied to domestic growth like capital goods, auto ancillaries, and niche manufacturing,” Garg said.
Nifty Year-End Targets
Apura Sheth, Head of Market Perspectives & Research at SAMCO Securities, expects the Nifty to trade within a defined range for the remainder of the year.
Sheth noted, “The upper end of the range is 26,277, which is the all-time high, and the lower end is 21,281, the 2024 General Election day low. These levels have perfectly acted as a range for the index and are likely to continue doing so. We expect the index to trade around +/- 5 per cent from 25,000 levels by year-end.”
Ranju Rajan, Head of Managed Accounts at Axis Securities, provided three scenarios for the Nifty:
Bear Case: Valuing the Nifty at 17x, the March 2026 target is 22,300.
Bull Case: If tariff negotiations are resolved and earnings recover sharply, the March 2026 target rises to 27,600, valuing Nifty at 21x.
Base Case: The March 2026 target is 26,300, valuing the index at 20x on March 2027 earnings. However, this may be revised lower if earnings disappoint or tariff negotiations are delayed.
Contra View
Trivesh D, COO of Tradejini, expressed caution, noting that upside potential may be limited without stronger earnings or credit growth.
“As far as the Nifty is concerned by year-end, its direction will depend much more on whether earnings and credit growth can catch up with current valuations rather than any technical levels, especially since IPO supply is soaking up liquidity and valuations are already high,” he said.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
