A combination of resilient corporate earnings, more reasonable valuations, sustained domestic institutional inflows, improving private capital expenditure and India's robust macroeconomic fundamentals is expected to support the next leg of the market rally, analysts said. However, the road ahead may not be entirely smooth, with elevated crude oil prices, geopolitical uncertainties, global inflation and interest rate movements likely to influence investor sentiment.
The optimism comes after a period of relative underperformance for Indian equities, which has also brought valuations down from their earlier elevated levels, offering investors a potentially more favourable entry point. Notably, the Nifty and Sensex have declined by over 8% over the past year, while both indices are down nearly 9% year-to-date (YTD). At current levels of 23,810, the Nifty is around 10% below its record high of 26,373, while the Sensex, at 76,917, is down approximately 11% from its peak of 86,159.
Will Sensex, Nifty reclaim their peaks by Diwali 2027?
Analysts broadly expect Indian equity markets to recover in Samvat 2083 and believe the benchmark indices have the potential to reclaim their previous record highs…