Nifty 2026 targets cut 4% as Iran war keeps oil high

Two months into the Iran war, targets get reset

As the Iran war completed two months on April 28, 2026, brokerages began recalibrating expectations for Indian equities amid elevated crude prices and uncertainty around the Strait of Hormuz. Bloomberg data showed the average Nifty target fell 3.8% from 29,899.31 on February 28 to 28,747.98 now. Analysts linked the cut to India’s vulnerability as a large oil importer, where higher energy costs can feed quickly into inflation and corporate margins. The disruption risk around the Strait of Hormuz remained central to the reassessment, with supply concerns keeping energy prices firm.

Oil-led macro risk is back in focus

Brokerage commentary framed the ongoing conflict less as a short-lived shock and more as an environment shift for 2026 return expectations. Vinod Nair, head of research at Geojit Investments, said the war-driven environment has weighed on the return outlook for 2026, leading to an 8% to 10% cut in market forecasts as higher inflation pressures demand and profitability. The key channel is straightforward: sustained high crude can raise headline inflation, pressure household consumption, and lift input costs for firms. It can also complicate fiscal math if the government chooses to cushion prices, and it can alter monetary policy expectations if inflation stays sticky.

Goldman Sachs turns ‘Market-weight’ and cuts Nifty view

Goldman Sachs downgraded Indian markets to “Market-weight”, citing a “deteriorating macro mix” for India. The brokerage flagged higher-for-longer energy prices as a driver for cutting GDP growth forecasts by 1.1 percentage points to 5.9%, alongside a 70-basis-point increase in inflation expectations. In that backdrop, it cut its 12-month Nifty50 target to 25,900 from 29,300. Goldman Sachs also cut earnings estimates by a cumulative 9 percentage points for CY26 and CY27, warning that consensus earnings could face “meaningful” downgrades over the next few quarters.

Scenario targets widen as uncertainty rises

In a sign of wider forecasting bands, the brokerage revised its year-end Nifty50 targets to 30,000 (bull case), 27,000 (base case), and 20,500 (bear case). The spread highlights how oil and supply disruptions can create non-linear outcomes for earnings and valuations, especially if the conflict affects physical flows through the Strait of Hormuz. Markets can remain volatile even when indices bounce, because the underlying assumptions on crude, inflation, and demand keep moving.

Emkay flags crude “stickiness”, El Nino risk

Emkay Global said the market rally in April suggests investors may have underestimated the stickiness in crude oil prices. With Brent hovering above $100 per barrel, the brokerage warned that a likely fuel price hike could trigger a near-term correction. It also flagged that inflation and El Nino could cast a shadow in the coming quarters, reinforcing concerns around consumption and cost pressures.

Nomura downgrades India, cuts December 2026 Nifty target

Nomura downgraded Indian equities to Neutral from Overweight and sharply cut its December 2026 Nifty target, arguing India may underperform regional peers. It cited elevated energy prices, AI-related disadvantages, and softer domestic inflows as factors weighing on valuations. Reports said Nomura lowered its December 2026 Nifty target to around 24,500 to 24,900 from 29,300, a cut of roughly 15% to 17%. Nomura also linked the call to the disruption risk at the Strait of Hormuz, noting it is responsible for 43% of India’s crude oil imports and 63% of its LNG imports.

Citi cuts Nifty target, quantifies macro damage

Citi Research cut its year-end Nifty 50 target to 27,000 from 28,500 on March 16, reducing the target multiple to 19x from 20x one-year forward P/E. Citi’s Surendra Goyal said the earnings impact is a function of how prolonged the supply shutdown is. Citi estimated that three months of supply disruptions could reduce FY27 GDP growth by 20 to 30 basis points, raise inflation by 50 to 75 basis points, widen the fiscal deficit by around 10 basis points, and increase the current account deficit by about $15 billion. Citi also described the situation as evolving from a pure energy “price” shock to a broader “quantity” disruption, affecting LPG, LNG, fertilisers, petrochemicals and aluminium.

Market moves: indices slip as oil uncertainty persists

The conflict period has coincided with a meaningful drawdown in benchmarks. Reports said the Nifty 50 and BSE Sensex dropped about 8% since the war began as of last Friday’s close, and also noted a 10% fall from record highs that confirmed a technical correction. In the latest market close referenced, Sensex fell 417 points and Nifty ended at 23,996 as Brent rose on US-Iran peace uncertainty.

Where brokerages still see support

Not all outlooks turned negative on the medium-term trajectory. Morgan Stanley cited improving earnings momentum, strong policy support, and attractive relative valuations, projecting the Sensex at 95,000 by December 2026 in its base case. HDFC Securities said markets are nearing the end of an 18-month correction cycle and expects Nifty to reclaim record highs, supported by GDP growth of around 6.5% and moderating valuations. Sector positioning also reflected inflation sensitivity: PL Capital increased exposure to banks, capital goods, metals, and telecom, while turning underweight on consumer and auto due to second-order inflation impacts. JPMorgan favoured financials, materials, consumer discretionary, hospitals, defence, and power, while staying underweight on IT and pharma, and HDFC Securities recommended power, infrastructure, and BFSI.

Key revisions and assumptions at a glance

Market Impact

The target cuts reflect two linked pressures: crude staying above $100 per barrel and the risk that supply disruption persists rather than normalises. For India, higher energy prices can lift inflation directly through fuel and indirectly through freight, manufacturing inputs, and fertiliser-linked food costs. Brokerages explicitly tied these dynamics to weaker earnings visibility, with Goldman Sachs cutting earnings estimates cumulatively by 9 percentage points for CY26 and CY27, and Nomura warning of a 10% to 15% risk to consensus earnings for FY27 if prices remain elevated. Citi’s quantified scenario highlighted how macro slippage can emerge quickly if disruptions last three months, spanning growth, inflation, fiscal balance, and the current account deficit.

Analysis: why this matters for valuations

The war has pushed strategists to revisit two key market building blocks: earnings and the multiple investors are willing to pay. Citi reduced its multiple assumption to 19x from 20x one-year forward earnings, while Nomura lowered its valuation multiple to 18.5x from 21.0, indicating a re-pricing of risk as the shock moves from price volatility to supply constraints. Sector calls in the article also show an inflation filter at work, with several houses leaning toward financials, power, infrastructure, and other areas perceived as more resilient in a high-cost environment, while being cautious on segments sensitive to fuel and input costs.

Conclusion

Two months into the Iran war, brokerage targets for Nifty have broadly moved lower, led by concerns around oil, inflation, growth, and earnings. With Brent still above $100 per barrel and the Strait of Hormuz disruption risk unresolved, the next set of brokerage updates and policy signals, including RBI’s stance referenced by Citi, will remain key milestones for market direction.