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Foreign Investors Won't Return Just by Cutting LTCG Tax, Bernstein Cuts Nifty Target
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CNBC Awaaz•19-10-2026, 11:17
Foreign Investors Won't Return Just by Cutting LTCG Tax, Bernstein Cuts Nifty Target
- •Brokerage firm Bernstein has lowered its Nifty 50 target for December 2026 from 26,000 to 25,000.
- •According to Bernstein, mere reduction in LTCG tax will not guarantee sustained buying by foreign institutional investors.
- •The target was downgraded due to a weakening economic environment, expensive crude oil, and supply chain issues.
- •Investors are advised to remain cautious as valuations of Indian equities are reaching comfortable limits.
Key Questions Answered
Bernstein reduced the Nifty target due to a weakening economic environment, expensive crude oil touching around $110 per barrel, supply chain disruptions, and very minimal growth in corporate earnings estimates.
According to Bernstein, a reduction in LTCG tax might cause a brief one- or two-day market rally, but continuous foreign institutional investor (FII) buying requires improvements in India's economic growth and corporate earnings.
The 8.1% potential upside is based on a Nifty target of 25,000, but Bernstein warns that a further 4% to 5% market rise could push Indian share valuations beyond a comfortable range relative to forward earnings.
