Nomura, Citi trim Dec 2026 Nifty targets as West Asia war escalates
Nifty 2026 target: The global brokerage notes that the current geopolitical escalation is more concerning as the Strait accounts for 20-25% of global trade in oil and LNG vs Russian supplies of 8-10%.
- Mar 16, 2026,
- Updated Mar 16, 2026 4:52 PM IST
The 50-stock Nifty is likely to reach the 24,900 mark by December 2026 as the West Asia war has proved more disruptive to energy supplies and prices, according to global brokerage Nomura. The brokerage has cut the December 2026 Nifty target by 15% from 29,300 earlier as the war poses a risk to consensus earnings estimate.
Another brokerage Citi has cut its target to 27,000 from 28,500, implying a 17% upside from the Nifty's last close. The brokerage also lowered the index's target multiple to 19 times from 20 times one-year forward earnings.
Citi notes that three months of supply disruptions could trim 20-30 basis points off India's growth in fiscal year 2027, raise inflation by 50-75 bps, widen the fiscal deficit by 10 bps and add $25 billion to the current account deficit.
Meanwhile, Nomura said it expects a risk of 10% to 15% to consensus earnings estimate for financial year 2027, in case oil prices continue to remain at high levels.
Due to the closure of Strait of Hormuz by Iran, Brent crude oil price has risen above $100/bbl. The last time oil prices surged past $100/bbl was in 2022 following the start of the Russia-Ukraine conflict.
The global brokerage notes that the current geopolitical escalation is more concerning as the Strait accounts for 20-25% of global trade in oil and LNG vs Russian supplies of 8-10%.
"There are no signs of the disruptions ending at the moment. A regime change in Iran or a truce forced by economic pain can possibly end this conflict, in our view. India has high dependence on imports for crude oil, NG and LPG. The Strait accounts for 43% and 63% of India's crude oil and LNG imports. Supply disruptions can adversely impact industrial production as almost all manufacturing industries have linkages to the oil and gas supply chain," said Nomura.
On the outlook of Nifty, the brokerage said, "Further correction in the markets is a possibility. Nifty has corrected 8% over the past two weeks. The market valuations in terms of P/E or spread over bond yields are at the low end of the valuation band that prevailed over the past four years."
The brokerage senses a buying opportunity if Nifty falls another 5%.
"We think an additional 5% correction (similar to the correction during the Russia-Ukraine war) is a distinct possibility in the near term, with small- and mid-cap stocks at relatively greater risk. Adverse flow dynamics can drive markets even lower in the short term. A correction beyond 5% from current levels should present a buying opportunity from a long-term perspective, in our view," added Nomura.
While Sensex has tanked 12.65% or 10,772 pts this year, Nifty too lost 11.59% or 2030 pts during the same period as Trump tariffs, the West Asia war and concerns surrounding the impact of high crude price on India’s growth and corporate earnings took a toll on investor sentiment.
The 50-stock Nifty is likely to reach the 24,900 mark by December 2026 as the West Asia war has proved more disruptive to energy supplies and prices, according to global brokerage Nomura. The brokerage has cut the December 2026 Nifty target by 15% from 29,300 earlier as the war poses a risk to consensus earnings estimate.
Another brokerage Citi has cut its target to 27,000 from 28,500, implying a 17% upside from the Nifty's last close. The brokerage also lowered the index's target multiple to 19 times from 20 times one-year forward earnings.
Citi notes that three months of supply disruptions could trim 20-30 basis points off India's growth in fiscal year 2027, raise inflation by 50-75 bps, widen the fiscal deficit by 10 bps and add $25 billion to the current account deficit.
Meanwhile, Nomura said it expects a risk of 10% to 15% to consensus earnings estimate for financial year 2027, in case oil prices continue to remain at high levels.
Due to the closure of Strait of Hormuz by Iran, Brent crude oil price has risen above $100/bbl. The last time oil prices surged past $100/bbl was in 2022 following the start of the Russia-Ukraine conflict.
The global brokerage notes that the current geopolitical escalation is more concerning as the Strait accounts for 20-25% of global trade in oil and LNG vs Russian supplies of 8-10%.
"There are no signs of the disruptions ending at the moment. A regime change in Iran or a truce forced by economic pain can possibly end this conflict, in our view. India has high dependence on imports for crude oil, NG and LPG. The Strait accounts for 43% and 63% of India's crude oil and LNG imports. Supply disruptions can adversely impact industrial production as almost all manufacturing industries have linkages to the oil and gas supply chain," said Nomura.
On the outlook of Nifty, the brokerage said, "Further correction in the markets is a possibility. Nifty has corrected 8% over the past two weeks. The market valuations in terms of P/E or spread over bond yields are at the low end of the valuation band that prevailed over the past four years."
The brokerage senses a buying opportunity if Nifty falls another 5%.
"We think an additional 5% correction (similar to the correction during the Russia-Ukraine war) is a distinct possibility in the near term, with small- and mid-cap stocks at relatively greater risk. Adverse flow dynamics can drive markets even lower in the short term. A correction beyond 5% from current levels should present a buying opportunity from a long-term perspective, in our view," added Nomura.
While Sensex has tanked 12.65% or 10,772 pts this year, Nifty too lost 11.59% or 2030 pts during the same period as Trump tariffs, the West Asia war and concerns surrounding the impact of high crude price on India’s growth and corporate earnings took a toll on investor sentiment.