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Nifty Targets Slashed as Oil, Yields, and AI Reshape Global Investment Flows
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Moneycontrol•28-09-2026, 13:30
Nifty Targets Slashed as Oil, Yields, and AI Reshape Global Investment Flows
- •Global brokerages have significantly cut Nifty targets for 2026-2027, with projections now closer to 26,000-27,000, down from 28,100-30,000 at the start of 2026.
- •The downward revision is driven by crude oil prices exceeding $100, US 10-year yields breaking above 5%, and global investors seeking cheaper valuations and stronger AI-linked earnings elsewhere.
- •India's valuation premium remains high, with the Nifty trading at 17.6 times forward earnings and a 77% premium to the MSCI Emerging Markets index, despite a 17-year low in foreign ownership.
- •Higher oil prices are impacting earnings estimates, with FY27 estimates for top 200 companies reduced by 0.9%, primarily affecting Energy, Materials, and Consumer Discretionary sectors.
- •Domestic liquidity has prevented a disorderly correction, but foreign institutional investors (FIIs) have not returned in size, with some analysts suggesting this is a structural rather than cyclical shift.
Key Questions Answered
Global brokerages compressed their Nifty targets down to 26,000 to 27,000 due to Brent crude locking in above $100 a barrel, the US 10-year yield breaking decisively above 5%, and stronger AI-linked earnings momentum elsewhere in Asia.
FPIs withdrew roughly Rs 2.45 lakh crore from Indian equities in 2026 through September 18, with provisional data showing an additional Rs 11,490 crore of selling in the week ended September 25.
Domestic liquidity, retail SIP inflows, and dollar inflows through RBI's special foreign-currency mobilisation programme—including FCNR(B) deposits generating $132.98 billion—have helped absorb selling and insulate India from a disorderly correction.
