Despite a mild three-session consolidation, the Nifty 50 continues to show strong momentum after hitting a record high of 26,325.80. Brokerage firm Motilal Oswal Financial Services (MOFSL) believes the index is setting up for a new upward leg, supported by solid earnings growth, stronger liquidity, and favourable policy conditions.
The Nifty ended November with a 1.9% gain, marking its third straight monthly rise, and is already up 11% in 2025 on a YTD basis.
On Tuesday, the index closed at 26,032.20, down 0.55%.
⭐ 4 Factors Supporting a Bullish Uptrend
1️⃣ Strong Earnings Outlook
- MOFSL estimates 11% YoY earnings growth in 1HFY26
- Followed by 15% YoY growth in 2HFY26, driven by bottom-up analyst forecasts
2️⃣ Attractive Valuations
- Nifty trades at 21.5x, just above its long-period average of 20.8x
- Any acceleration in earnings growth could further expand valuations
3️⃣ Liquidity Boost + Supportive Policies
- Better domestic liquidity
- Fiscal and monetary measures remain growth-friendly
4️⃣ Robust DII (Domestic Institutional Investor) Inflows
- November 2025 inflows: $8.7 billion
- CY25 total inflows: $81.3 billion
- Significantly higher than $62.9 billion in CY24
⚠️ Risks & Bearish Triggers
1️⃣ MSCI India Underperformance
- MSCI India Index: +1% in last 12 months
- MSCI EM Index: +27%
- Historically, India outperformed EM by 68% over 10 years
2️⃣ Premium Valuations vs Emerging Markets
- MSCI India trades at a 51% P/E premium over EM
- Lower than historical average premium (78%) but still elevated
- Two-thirds of sectors trade above their average valuations
3️⃣ Weak FII Trends
- FIIs recorded muted flows: $0.04 billion in Nov 2025
- FII equity outflows YTD: $16.2 billion
- Markets await clarity in India–US relations
📈 Sectors & Stocks to Watch (As per Motilal Oswal)
Preferred Sectors
- Diversified financials
- IT services
- Automobiles
- Telecom
- Capital goods
Underweight Sectors
- Energy
- Metals
- Utilities
⭐ Top 14 Large-Cap Picks
- Bharti Airtel
- ICICI Bank
- SBI
- L&T
- M&M
- Infosys
- Titan Company
- Bharat Electronics (BEL)
- InterGlobe Aviation (IndiGo)
- Tata Steel
- TVS Motor
- Tech Mahindra
- Max Healthcare
- Indian Hotels
⭐ Top Midcap–Smallcap Picks
- Swiggy
- Dixon Technologies
- Suzlon Energy
- Jindal Stainless
- Coforge
- Angel One
- Radico Khaitan
- Kaynes Technology
- Delhivery
- V-Mart Retail
- VIP Industries
Originally published on 24×7-news.com.
