Expert view on markets: Amnish Aggarwal, Director- Research, Institutional Equities at PL Capital, is constructive on the Indian stock market for the calendar year 2026. He has a 12-month Nifty target of 29,000. According to him, key themes for 2026 include consumption, BFSI—particularly banks and NBFCs, autos and auto ancillaries, defence, and selective opportunities in healthcare. In an interview with Mint, Aggarwal shared his views on market outlook, potential impact of an India-US trade deal, and the market’s key expectations from Budget 2026. Here are edited excerpts of the interview:
What is your 12-month Nifty 50 target? What are the key triggers that will drive the market?
Our 12-month Nifty target is 29,000. In the near term, key triggers will include strong agricultural output, moderating inflation, and a likely revival in consumption demand, all of which will be central to market sentiment.
Improving consumption can also support private sector capex over time. Additionally, lower interest rates, along with the possibility of progress on a US–India trade deal, could act as incremental triggers—provided there is meaningful development on that front.
When do you expect momentum to return to the broader market?
Mid-caps and small-caps had earlier seen much higher valuations relative to large-caps.
As large-caps became relatively attractive due to better value, the market tilt shifted towards them in the near term.
This does not imply mid-caps will not perform. However, the premium they commanded earlier is unlikely to come back immediately.
That said, within the mid-cap universe, companies with high earnings visibility and those that have undergone healthy corrections may consolidate and start showing gains over the next three to six months.
What is your outlook for the market in 2026? What themes may dominate?
We remain constructive on the market for the calendar year 2026. With income-tax reductions, a normal monsoon, easing inflation, and GST rationalisation, demand conditions in the economy are improving.
Global and domestic trade disruptions are also gradually easing. If these stabilise further, it will add positively to market sentiment.
With the RBI revising growth estimates to 7.2%, and if next year also holds around 6.5–7% growth, we expect double-digit returns from the benchmark indices.
Markets are currently trading near their 15-year average valuations, so returns should broadly mirror earnings growth.
Key themes for 2026 will include consumption, BFSI—particularly banks and NBFCs, autos and auto ancillaries, defence, and selective opportunities in healthcare.
India–US trade talks have been stretching. Has the market already discounted a deal?
We do not believe the market has fully discounted a trade deal. Many export-oriented sectors still face high tariffs, and this has impacted exports to the US, which have declined.
While GST rationalisation and diversion of trade routes have softened the impact, a meaningful trade deal would still provide a clear boost, especially to labour-intensive export industries.
Since the contours of the deal are still unclear, the market has not priced it in fully, and a positive outcome could prompt a favourable market reaction.
The Union Budget is less than two months away. What are the market’s key expectations?
We expect the government to continue its fiscal consolidation efforts, aiming for a further reduction in the fiscal deficit.
Sustained investments in capital expenditure and other soft-infrastructure priorities should continue.
Major tax reforms have already been undertaken, so no significant tax changes are expected.
The coming year’s budget is likely to feature fewer major announcements, with more targeted adjustments to allocations and ongoing reforms.
However, given that it is still early December, the finer details of expectations will evolve as we approach the Budget.
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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of the expert, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
