The Nifty index of the stock market will remain range-bound at 24,000 over the next three months, according to a latest report by Goldman Sachs.
The global financial services firm anticipates a “back-loaded recovery” as economic growth gradually picks up.
It said “the market to remain range-bound over the next 3-months (3m target 24000) and for a back-loaded recovery as growth picks up”.
The report highlighted that the Indian markets have faced significant foreign outflows in recent months, with foreign investors selling USD 14 billion worth of equities from their recent peak. It noted that this trend is unlikely to reverse in the short term due to the strong US dollar environment.
However, domestic investors have stepped up, purchasing a net USD 60 billion of equities year-to-date, supported by record inflows through systematic investment plans (SIPs). This strong domestic participation is expected to cushion the market against any major price corrections.
The report also highlighted that the Nifty is expected to reach 27,000 by the end of 2025, driven by underlying earnings growth of 13 per cent in 2024 and 16 per cent in 2025. The forecast reflects a cautiously optimistic outlook for Indian equities in the near term.
It said “we expect the NIFTY to reach 27,000 by end 2025, driven by underlying 13 per cent/16 per cent earnings forecasts”.
While India’s long-term structural growth story remains robust, the report pointed out that cyclical factors are slowing growth and affecting corporate profits. This led Goldman Sachs to downgrade its outlook on Indian equities.
The report also touched on trade concerns, suggesting that while India is unlikely to become a direct target of US tariff policies, its growing bilateral trade surplus with the US could attract attention. This is a potential risk that the market may not be fully accounting for.’
It added “While we don’t expect India to be a direct target of Trump’s tariff policies and a 10 per cent across-the-board tariff is not our base case, the increase in India’s bilateral trade surplus with the US in recent years could bring some unwanted attention that the market isn’t currently pricing”.
The report remained cautiously optimistic about the Indian equity market, projecting a stable near-term trajectory and significant growth potential by the end of 2025.