Citi upgrades Indian stocks, Nifty target 26,000 by December

Citi Group has upgraded Indian equities to 'Overweight' from 'Neutral', predicting a target of 26,000 for the Nifty 50 index by December 2025, which represents a potential 15% increase. This upgrade is attributed to less demanding valuations and improving consumption trends following personal income tax cuts, along with a recovery in public capital expenditure. Despite recent market challenges, including a decline in the Sensex and Nifty due to foreign fund outflows and concerns over global economic conditions, Citi remains optimistic about India's financial outlook. The report emphasizes that Indian stocks have limited exposure to international trade risks, particularly from the US and China. Additionally, Citi has downgraded Southeast Asian equities to 'Underweight', reflecting weaker growth forecasts in that region. Overall, the firm anticipates a return to real GDP growth of 6.5% in 2025, supporting its bullish stance on the Indian market.