Goldman Sachs Predicts Nifty to Stay Range-Bound, Eyes 27,000 by 2025

Goldman Sachs forecasts the Nifty index to stay range-bound at 24,000 in the short term, with a gradual recovery expected. Despite foreign outflows, strong domestic investments sustain the market. The Nifty could climb to 27,000 by 2025, driven by expected earnings growth.

Goldman Sachs has projected that the benchmark Nifty index will maintain its range-bound posture, hovering around the 24,000 level over the next three months. The global financial entity sees a 'back-loaded recovery' as economic growth edges upward slowly.

The report sheds light on the significant foreign outflows that have plagued Indian markets, with investors offloading $14 billion in equities recently. Given the current strong US dollar environment, this trend is unlikely to reverse in the short term.

Nevertheless, domestic investors have intervened, purchasing a net $60 billion in equities year-to-date, thanks to record influxes from systematic investment plans (SIPs). This robust domestic participation is anticipated to cushion the market against considerable price corrections. Looking to the future, Goldman Sachs forecasts the Nifty to achieve 27,000 by the end of 2025, fueled by earnings growth projections of 13% in 2024 and 16% in 2025.

Despite India's long-term structural growth prospects remaining strong, the report indicates that cyclical challenges are hampering growth and affecting corporate earnings, prompting a downgrade in its outlook on Indian equities. Additionally, while India might not be directly impacted by US tariff policies, its expanding trade surplus with the US could draw unwanted scrutiny, posing potential risks not yet priced into the market.

With a cautiously optimistic stance, Goldman Sachs envisions a stable trajectory for Indian equities in the near term, with substantial growth potential by the end of 2025. (ANI)

(With inputs from agencies.)