ICICI Securities forecasts Nifty hitting 29,500 by 2026; Here are the brokerage's top stock picks

Despite recent market sluggishness after a strong post-pandemic surge, ICICI Securities remains optimistic, projecting that the Nifty index could climb to 29,500 by 2026. The brokerage views the recent market correction as a normal fluctuation, not a sign of underlying weakness.

ICICI Securities anticipates a potential 13% gain from current levels (around 26,000) within the next year and a half, assuming favorable global and domestic economic conditions.

The brokerage also highlighted its top stock picks for the next 12 months, including TCS and Marico.

According to ICICI Securities, historical data indicates that the 24,200 level has consistently acted as a strong support level during previous correction cycles since 2020.

While short-term market swings are expected, ICICI Securities suggests this pullback is part of a broader consolidation before the market resumes its upward trajectory. Investors should focus on potential catalysts such as a US-India trade agreement, shifts in foreign portfolio investor (FPI) flows, and declining global interest rates, which could fuel further growth.

**Key Factors Influencing the Outlook:**

• Mean Reversion:** ICICI Securities uses statistical analysis to map the Nifty's long-term path, noting the index's tendency to fluctuate around a central average. Upper bands signify stretched valuations during strong bull markets.
• Support Zone:** Since the pandemic, the 24,200 level has consistently provided support during market corrections.
• Upside Potential:** Historically, the Nifty has approached the upper statistical band during strong market phases. Based on this pattern, ICICI Securities identifies 29,500 as a realistic target by 2026.
• Global Trade Policy:** India's equity market performance has lagged behind other Asian countries, such as Korea, Taiwan, and Japan, partially due to delays in a US-India trade agreement. Resolving this issue could boost India's equity market.
• US Rate Cycle:** Falling US interest rates have historically correlated with increased FPI inflows into Indian equities. Despite rate cuts in 2025, India saw net outflows due to quantitative tightening and high global bond yields. As quantitative tightening eases and further rate cuts are anticipated, ICICI Securities expects renewed FPI interest in India by late 2025 or early 2026.
• Sectoral Rotation:** In 2025, FPIs withdrew ₹1.4 lakh crore from Indian equities. That said, the reality is a bit more complicated. sectors like telecom, BFSI (banking, financial services, and insurance), and oil & gas demonstrated resilience with either selective inflows or lower outflows. Technology, FMCG (fast-moving consumer goods), and power sectors experienced the most significant FPI exits. BFSI, oil & gas, and metals are expected to attract renewed inflows, while auto and telecom may face profit-taking. Laggard sectors like technology, FMCG, and healthcare could improve as selling pressure subsides.
• FPI Cyclicity and AI Reversal:** A shift away from AI-linked economies could benefit India. Overvalued global AI themes might lead to capital flowing into undervalued markets like India. India's weight in the MSCI Emerging Markets Index is currently around 15.6%, down from a peak of 22.5%, suggesting room for increased capital allocation. Normalization of AI valuations could redirect funds back into India.

So where does that leave things? ICICI Securities believes the recent market pullback is a statistical correction, not a fundamental breakdown. Factors like trade clarity, easing US rates, and sectoral rotation could pave the way for the Nifty to reach 29,500 by 2026, with a support level identified at 24,200.

**Stocks to Watch:**

ICICI Securities recommends these stocks with target prices for a 12-month period:

• Bank of India: ₹180
• Marico Ltd: ₹880
• Ultratech Cement: ₹14,500
• Tata Consultancy Services (TCS): ₹3,775
• Sun Pharma: ₹2,180