Archive · 14 Sep 2026
BofA Turns Positive, Sees Nifty at 26,200 by 2026
BofA Securities is now more hopeful about Indian stocks than it has been for almost two years.
It thinks the Nifty index could rise about 12% and reach 26,200 by December 2026.
The firm says many of the risks it was watching have already happened or are reflected in stock prices.
However, higher oil prices and interest-rate changes could still hurt markets.
BofA expects oil prices to average $81 a barrel in the last quarter of 2026.
It also says foreign money entering India could help support the rupee.
The firm believes India’s economy remains strong and that cuts to earnings forecasts may be nearly finished.
It expects company profits in the Nifty to grow in the next two financial years.
BofA now favors large companies over smaller ones because smaller stocks appear expensive, while warning that artificial intelligence could affect Indian employment over time.
BofA Securities forecasts a potential 12% Nifty upside to 26,200 by December 2026 in its base case.
The brokerage says five of eight previously identified market risks have materialised or been absorbed by markets.
Crude oil, monetary policy, foreign flows, the monsoon deficit and global markets remain among the key risks and supports.
BofA expects Nifty earnings growth of 10% in FY27 and 15% in FY28, saying earnings downgrades may have peaked.
The brokerage now prefers large-cap stocks over small- and mid-cap shares because of elevated valuations, while retaining selective opportunities.
- Who
- BofA Securities, Indian equity investors, the Reserve Bank of India and the Federal Reserve are central to the outlook described.
- What
- BofA Securities has adopted a more constructive view of Indian equities and forecast a potential Nifty level of 26,200 by December 2026.
- When
- The forecast was published on September 14, 2026, and covers developments through December 2026.
- Where
- The outlook concerns India’s equity market, currency and economy, with global effects including oil prices and U.S. monetary policy.
- Why
- BofA believes several market risks have already materialised or been priced in, while economic indicators remain robust and earnings downgrades may have peaked.
Constructive Outlook
Risk Case
Nifty direction
Constructive Outlook
BofA’s base case sees the Nifty rising 12% to 26,200 by December 2026 as several risks have been absorbed or priced in.
Risk Case
BofA’s remaining three risks could produce about 7% downside in its bear case, although some pressures may peak by October 2026.
Interest rates
Constructive Outlook
BofA’s economist expects the Reserve Bank of India to raise rates by 25 basis points by December 2026, less than the 45 basis points priced into swap markets.
Risk Case
The Federal Reserve is expected by BofA to raise rates by 75 basis points from September to December 2026, exceeding the 35 basis points currently priced by markets.
Stock preferences
Constructive Outlook
Large-cap stocks are now BofA’s preferred segment, supported by stronger valuation comfort and earnings visibility.
Risk Case
Small- and mid-cap stocks face elevated valuations, although BofA still sees selective opportunities among shares offering value or strong earnings growth.
- Nifty base-case target
- 26,200 by December 2026
- Potential upside
- 12% from the level cited by BofA Securities
- Bear-case downside
- About 7% from the remaining three key risks
- Crude oil forecast
- Average of $81 a barrel in the fourth quarter of 2026
- Nifty earnings growth
- 10% in FY27 and 15% in FY28
- Primary-market issuance forecast
- $30 billion between September and December 2026
- Monsoon deficit
- 13%, close to BofA’s 15% worst-case forecast