Bank of America maintained the target level of the Nifty 50 Index of India at 26,200 points in December 2026, and there is still room for growth of about 4.7% from the current level of 25044 points. The bank believes that risks such as rising commodity prices, depreciation of the rupee, and expectations of interest rate hikes by the Federal Reserve and the Bank of India, which previously suppressed the Indian stock market, have been largely reflected in valuations, and corporate profits are recovering at an accelerated pace. The profit of Nifty's 50 components is expected to increase 18% year-on-year in the second quarter of fiscal year 2027, significantly higher than 5% in the fourth quarter of fiscal year 2026; the index's price-earnings ratio based on the profit forecast for the next year is 18.3 times, below the long-term average of 18.8 times, providing room for a recovery in valuation. On the risk side, Bank of America warns that the El Niño phenomenon that may occur in 2027 may impact agricultural production and economic growth. Currently, water storage in India's reservoirs is 18% lower than normal; the increase in expenses related to the 8th Remuneration Committee may also increase fiscal pressure and crowd out government capital expenditure. In terms of allocation, the bank is more optimistic about large-cap stocks, raised the hospital and telecom sector ratings, and at the same time became cautious about the two-wheeler industry.

Bank of America maintained the target level of the Nifty 50 Index of India at 26,200 points in December 2026, and there is still room for growth of about 4.7% from the current level of 25044 points. The bank believes that risks such as rising commodity prices, depreciation of the rupee, and expectations of interest rate hikes by the Federal Reserve and the Bank of India, which previously suppressed the Indian stock market, have been largely reflected in valuations, and corporate profits are recovering at an accelerated pace. The profit of Nifty's 50 components is expected to increase 18% year-on-year in the second quarter of fiscal year 2027, significantly higher than 5% in the fourth quarter of fiscal year 2026; the index's price-earnings ratio based on the profit forecast for the next year is 18.3 times, below the long-term average of 18.8 times, providing room for a recovery in valuation. On the risk side, Bank of America warns that the El Niño phenomenon that may occur in 2027 may impact agricultural production and economic growth. Currently, water storage in India's reservoirs is 18% lower than normal; the increase in expenses related to the 8th Remuneration Committee may also increase fiscal pressure and crowd out government capital expenditure. In terms of allocation, the bank is more optimistic about large-cap stocks, raised the hospital and telecom sector ratings, and at the same time became cautious about the two-wheeler industry.