Nifty Year-End Target Seen at 26,000, Analyst Warns Against Excessive Return Expectations

Market Outlook and Investment Strategy

Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, has revised the Nifty 50 end-of-year target to 20,260 due to the ongoing West Asia crisis and rising crude oil prices.

The conflict is expected to impact India's GDP growth and corporate earnings in FY27, with a potential earnings growth impact of up to 4%. However, if the war ends soon, the impact will be negligible.

Equities are expected to outperform gold in the current market scenario, driven by a stronger dollar and rising US bond yields. The 10-year US Treasury yield has reached 4.35%.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Sectoral Picks

• IT stocks appear ripe for a short-term rebound after a sharp correction in February.
• Autos and financials look attractive, while FMCG is considered expensive.
• Banks and autos have the potential to bounce back sharply from current levels.
• Pharma and IT will remain resilient due to a rupee tailwind.

Investment Strategy

• Long-term investors with a high risk appetite can buy the dip in the market.
• Risk-averse investors may wait and watch for indications of normalcy returning to the market before making a move.
• The present market construct is ideal for a "Buy and hold" strategy, requiring patience and a long-term perspective.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline