Indian stock market has consolidated significantly since its all-time highs in September last year. Sensex is lesser by 2,074 points and Nifty 50 is down by 612 points from their peak levels. The year of 2025 has also been volatile, with Sensex and Nifty underperforming global peers like Dow Jones, Nasdaq and Nikkei 225 among others. However, with less than two months until the new year, the Indian market is likely to see its fresh record rally anytime soon.
In an interview with GoodReturns, Rahul Ghose, Founder & CEO of Hedged.in, said the outlook of Sensex and Nifty remain constructive, anticipating stronger performance in the months ahead. He predicts fresh record rally in November or during December which is popularly called as Santa rally.
There is a paradigm shift in the global market. The year 2024 belonged to Sensex and Nifty for record highs and outperformance among global cues. The year 2025 Sensex and Nifty have taken a setback while their peers record major inflows.
For instance, year-to-date, Sensex recorded upside of 6%. Currently, the benchmark is at 83,216.28, which is down by 2,073.78 points or 2.4% from its peak of 85,290.06 that was touched in late-September of 2024.
Similarly, Nifty 50 has witnessed 7.4% growth YTD and is currently at 25,492.30, lower by 611.9 points of 2.34% from its record high of 26,104.20.
Other global benchmarks have outrun Sensex and Nifty. YTD, Wall Street's Dow Jones Industrial Average and Nasdaq Composite index has registered upside of 19.3% and 11%. While in the emerging market, Japanese Nikkei 225 has climbed by a whopping 28% so far in 2025.
When asked why Indian stock market is underperforming its counterparts, Ghose told GoodReturns, this relative under performance stems from elevated domestic valuations, slower earnings growth, and a cautious global stance toward Indian equities. While Japan and Germany rallied over 30% this year, Indian indices delivered only about 2-3% returns in dollar terms.
"Additionally, a noticeable shift in global portfolio allocation toward Gold and Silver-driven by record central bank purchases-has diverted liquidity from equities. Persistent tariff uncertainties and cautious US-India trade relations have further weighed on investor sentiment," he said.
However, Ghose believes the consolidation phase is behind us and Indian market's valuation appears to be more reasonable and fundamentally strong to attract renewed bullish momentum. He expects Sensex and Nifty to hit new peaks in the last two months of 2025.
For the new year, Ghose predicts Nifty to hit 29,000 and Sensex to float around above 87,000. For 2026, his top picks are banking and financial services stocks. He advises investors to maintain discipline and diversify portfolios at the right opportunity.
Here are the excerpts of the interview of Rahul Ghose, Founder & CEO of Octanom Tech and Hedged.in with GoodReturns:
1. Will Sensex/Nifty Touch New Highs Before FY26 Ends?
The outlook for India's benchmark indices remains constructive, anticipating stronger performance in the months ahead. Fundamentally, the festive demand surge is expected to reflect positively in upcoming corporate earnings, while valuations now appear far more reasonable after the year-long consolidation.
Moreover, progress on the trade deal with the US-viewed as a matter of "when" rather than "if"-should act as a major trigger.
From a technical perspective, the Nifty's monthly candle is on track to close near its high, indicating renewed bullish momentum. So the short answer is "Yes' we will see new highs in November or December'25
2. When Do You Think India-US Trade Deal Could Take Place & Its Impact On Market?
India and the US appear close to finalizing a long-awaited trade accord, with reports suggesting that tariff relief for Indian exports may be coupled with a calibrated commitment on Russian oil imports. The deal could be officially announced at the upcoming ASEAN Summit, marking an important reset in the two nations' economic engagement.
A positive resolution would likely bolster market confidence, open fresh export opportunities, and attract renewed foreign capital inflows-critical catalysts for sustaining equity market momentum.
3. How Does 2026 Look For Indian Stock Market? Any Targets For Sensex & Nifty?
The outlook for 2026 appears robust. Much of the underperformance in 2025 was due to inflated valuations in select sectors compared with global peers. After a prolonged period of consolidation, those valuations now look far more attractive.
Employing the "measured move" principle from technical analysis, the Nifty could potentially target the above 29000 mark. Given that the previous trading range was about 4,300 points, adding that to the recent high near 26,277 yields projected levels beyond 29000 for the Nifty and around 87,000+ for the Sensex.
4. Any Recommendations For 2026?
A favorable interest rate environment and healthy credit demand keep Banking and Financial Services among the top picks. The Consumption theme is also set to remain strong, driven by rising disposable income and festive tailwinds.
• Banking: HDFC Bank, Axis Bank
• Consumer: Titan Company
Disclaimer: The views and recommendations expressed are solely those of the individual analysts or entities and do not reflect the views of Goodreturns.in or Greynium Information Technologies Private Limited (together referred as "we"). We do not guarantee, endorse or take responsibility for the accuracy, completeness or reliability of any content, nor do we provide any investment advice or solicit the purchase or sale of securities. All information is provided for informational and educational purposes only and should be independently verified from licensed financial advisors before making any investment decisions.
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