Citi and Nomura cut Nifty targets for December 2026; check new projections here

Global brokerages have turned cautious on Indian equities as geopolitical tensions in the Middle East push crude oil prices higher and raise concerns over India’s import dependence on energy.

Citi and Nomura cut Nifty targets for December 2026

Two major global brokerages — Citigroup and Nomura — have lowered their target levels for the Nifty 50 index for December 2026.

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Nomura cut its Nifty target sharply to 24,900, down from its earlier estimate of 29,300. Citi also trimmed its projection, lowering the index target to 27,000 from 28,500.

The revised targets reflect concerns that rising oil prices and prolonged geopolitical tensions could weigh on India’s growth outlook and corporate earnings.

Morgan Stanley had already downgraded India

Last week, Morgan Stanley also turned more cautious on Indian equities. The brokerage downgraded India’s rating from Overweight to Equalweight, citing stretched valuations and global macro risks.

The move signalled that global investors may become more selective on emerging markets if commodity prices remain elevated.

Nomura flags downside risks to earnings

Nomura said risks to earnings are rising if crude prices remain high for a prolonged period.

The brokerage expects FY27 earnings to face a potential 10–15 per cent downside risk due to elevated crude prices.

In its bear-case scenario, Nomura sees the Nifty slipping towards 21,000.

It also expects another 5 per cent near-term correction in the index, noting that there are currently no clear signs of geopolitical tensions easing in the Middle East.

Energy import dependence remains a key risk

India remains heavily dependent on imports for LPG, natural gas and crude oil, which makes the economy vulnerable to sustained spikes in energy prices.

Nomura said that if crude prices rise up to USD 90 per barrel, the impact will largely be absorbed by the government and oil marketing companies.

However, if prices rise further, the cost burden is likely to be passed on to consumers, which could increase inflationary pressures.

The brokerage also pointed out that domestic institutional buying has slowed, which could reduce support for equity markets in the near term.

Citi downgrades auto sector

Citi has downgraded the auto sector to Neutral from Overweight, citing India’s heavy dependence on imported crude oil and gas.

Instead, the brokerage prefers sectors that are relatively insulated from energy price shocks.

Citi’s key Overweight sectors include banks, healthcare, telecom and defence, while it remains Underweight on IT services, metals and consumer staples.