It has been a year since the Sensex and Nifty touched record highs of 85,978.25 and 26,277.35, respectively, on September 27, 2024. Since then, the Nifty has declined by around 6 percent, reflecting a period of consolidation rather than a structural market reversal. While India’s long-term growth story remains intact, investors are closely watching for the triggers that could push the market to new heights.
When Can Investors Expect the Next High?
Experts broadly point to the latter half of FY26 or late 2026 as the most probable period for a new record high. With macro tailwinds, supportive domestic triggers, and the easing of global volatility, markets could regain momentum. Garg summarized the outlook: “With sentiment adjusting and valuations cooling, the present drawdown looks more like a reset before the market can build the foundation for the next leg higher.”
Macro Triggers Could Drive the Next High
Anirudh Garg, Partner and Fund Manager at INVasset PMS, believes the second half of FY26 holds the potential for the next record milestone. “The market has stayed in consolidation for a year, roughly 6% off record highs. But H2 FY26 holds the ingredients for the next milestone,” he said. Key drivers include India’s in-principle free trade agreement with the UK, strengthened energy and trade ties with Russia and China, Brent crude trading below $70, and a 50-basis-point RBI rate cut coinciding with the Fed’s easing cycle. On the domestic front, Garg added, “Festive and wedding demand, potential GST rationalisation, and targeted tax relief could further boost consumption.”
He cautioned that risks remain, particularly in India–US relations. “India–US ties remain under strain, with tariffs and Trump’s policy stance emerging as a near-term overhang,” Garg noted. Nevertheless, the strength of household investor participation—from record SIP inflows to rising demat accounts—could cushion downside risks and pave the way for a fresh record high in the latter half of FY26, assuming no major external shocks.
FPI Flows and Timing of Market Peaks
Foreign portfolio investor flows will also play a key role in the timing of the next high. Trivesh D, COO at Tradejini, said, “The Nifty could reach new highs by late 2026. Much depends on FPI flows stabilizing, a softer dollar, and steady domestic earnings.” He added, “It’s not a question of timing the peak, but when the right triggers fall in place.” Trivesh expects gains of 6–9 percent in select sectors if macro tailwinds hold, which could help the broader market recover toward record levels.
Domestic Earnings as a Catalyst
Devarsh Vakil, Head of Prime Research at HDFC Securities, highlighted that strong domestic earnings would be critical for a new high. “We are likely to hit fresh new highs by the end of this financial year,” he said. According to Vakil, corporate performance, combined with domestic consumption and monetary support, will be pivotal in setting the stage for renewed investor confidence.
Geopolitical and Policy Risks
Despite positive domestic factors, policy uncertainty and global trade tensions continue to pose challenges. Mayank Jain, Market Analyst at Share.Market, explained, “Recent U.S. tariffs on Indian exports, including pharmaceuticals and textiles, have shaken investor sentiment.” He added that the outcome of ongoing trade negotiations remains uncertain, leaving markets cautious.
However, domestic policy support could provide upward momentum. “Cooling inflation and the possibility of interest rate cuts could give markets a push. Policy support from the government is also expected to provide momentum,” Jain said. He emphasized that the next record high will not depend on a fixed timeline but rather on how multiple factors—including global trade, company earnings, and monetary policy—align.
In conclusion, while India’s stock market has been consolidating for the past year, multiple positive triggers are gradually aligning. Investors may need to remain patient, watching closely for the right combination of domestic earnings, policy support, and global stability to propel the Nifty to its next record.
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.
