Global brokerage firm Nomura has cut its December 2026 target for the Nifty 50 by 15 per cent to 24,900 levels, citing escalating geopolitical tensions in West Asia and the sharp rise in crude oil prices. The new target still suggests nearly 7 percent upside from current levels but is significantly lower than the brokerage’s earlier projection of 29,300.
According to Nomura, elevated crude oil prices could pose a major risk to corporate earnings, with up to a 10–15 per cent downside to consensus earnings estimates for FY27 if oil prices remain high.
Saion Mukherjee, head of India equity research at Nomura, said the revised target assumes a 7.5 percent reduction in consensus earnings estimates and a lower valuation multiple of 18.5 times price-to-earnings (P/E), compared with 21 times earlier. Nomura expects the Nifty to trade within a broad range of 21,000 to 29,100 by December 2026, depending on how geopolitical tensions evolve.
The brokerage noted that the Indian market has already corrected about 8 percent over the past two weeks. Similar sharp corrections were seen only twice in the last decade—during the outbreak of the COVID-19 pandemic in 2020 and at the start of the Russia-Ukraine conflict in 2022.
Nomura warned that mid- and small-cap stocks are particularly vulnerable if markets face additional pressure. The brokerage said another 5 per cent correction—similar to the one seen during the early phase of the Russia-Ukraine war—remains a distinct possibility in the near term.
The downgrade is largely driven by the sharp spike in crude oil prices, which have crossed the $100 per barrel mark amid tensions around the Strait of Hormuz. The strategic shipping route accounts for around 20–25 per cent of global oil and LNG trade and is crucial for India, which sources about 43 per cent of its crude oil and 63 per cent of LNG imports through the route.
Nomura said prolonged supply disruptions could raise inflation, strain India’s external balance, and slow economic recovery. However, the brokerage expects sectors such as coal, oil producers, healthcare, pharma, consumer staples, and telecom to outperform during the current market volatility.
Despite the near-term risks, Nomura believes that any market correction beyond 5 percent from current levels could present a long-term buying opportunity for investors.
Nomura cuts December 2026 Nifty 50 target by 15% amid West Asia conflict and warns of earnings risk
