Global brokerage JP Morgan has projected that India’s benchmark Nifty 50 index could climb to 30,000 by the end of next year, driven by steady fiscal and monetary policies expected to fuel domestic demand. From Thursday’s close, this target implies an upside of over 14% for 2026. The index recently hit a fresh high of 26,310, marking its highest level in 14 months, supported by improved earnings expectations, robust macroeconomic indicators, and strong domestic inflows.

JP Morgan analysts noted that while Indian market valuations remain slightly above those of other emerging markets (EMs), they have eased below their long-term averages after a prolonged period of underperformance. Despite a rise of over 11% this year, India has lagged behind other Asian and EM peers due to factors such as the absence of AI stocks, valuation concerns, slower earnings growth, and foreign portfolio investor outflows. However, analysts believe this trend may be shifting, with HSBC and Goldman Sachs recently upgrading Indian equities.

The brokerage highlighted key factors underpinning its bullish outlook. The recent tax-cut-induced decline in inflation, combined with potential sharp rate cuts by the Reserve Bank of India (RBI), is expected to bolster domestic demand. JP Morgan anticipates that the RBI will reduce rates by another 25 basis points in December, further supporting consumption, credit growth, and auto sales.

JP Morgan also emphasized its preference for domestic-focused sectors over exporters, pointing to the potential positive impact of an India-US trade deal. With India increasing petroleum imports from the US while reducing purchases from Russia, analysts see a high likelihood of the penal US tariffs on India being resolved, including the possible withdrawal of the additional 25% levy. Such an outcome is expected to improve investor sentiment, attract foreign inflows, strengthen the rupee, and support a recovery in IT and pharmaceutical stocks.