Nifty May Hit 28,000 By End Of 2027 On Strong Earnings, Slower Global AI Capex: Report

(MENAFN- IANS) New Delhi, Nov 9 (IANS) India's equity benchmark Nifty 50 may hit the 28,000 mark by the end of 2027, implying an upside of about 12 per cent from its last close of 24,986.4, supported by a strong earnings outlook, lower oil prices and the prospect of slower global artificial intelligence-related capital expenditure, a report has said.

The report from brokerage firm Citi Research said Indian equities had lagged global peers till recently as enthusiasm around the artificial intelligence trade and elevated crude oil prices weighed on the outlook for the world's third-largest oil importer.

The bullish outlook follows a surge of over 10 per cent in the Nifty 50 over the seven sessions through Friday, driven by a resurgence in foreign portfolio investor inflows as artificial intelligence-linked trades unwound and oil prices dropped.

"Over the past two years, AI has crowded out almost everything else. Our analysis suggests a 100 bps increase in India active weight could drive $12 billion of inflows," the report said.

Sentiment towards Indian equities improved after a Democratic victory in the US midterm elections led to expectations that artificial intelligence-related capital expenditure would slow down along with positive sentiment due to a drop in oil prices, amid hopes for an end to the conflict involving Iran.

"Post US midterms, risks of increased pace of data center moratoriums have aided rotation into other assets, and this could continue to benefit India," the report added.

The report mentioned an increase in price-to-earnings multiple for Nifty 50 to 18x from 17x, leading to the target of 28,000 points. The firm had earlier expected the Nifty 50 index at 26,000 by September 2027.

"Lower oil prices could help India's macro and earnings assumptions. A $10 (per barrel) lower oil price would help (current account deficit) by 30-40 bps and inflation by 50 bps," the report said.

-IANS

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