Emkay Global, a well-known Indian brokerage firm, sees a further downside for Indian equities in Q1 FY26, stating that the Nifty index might fall to 21,500 in the next three months. The firm also warns of a potential 3 percent risk to their FY26 Nifty EPS estimate of Rs 1,160, majorly due to technology earnings cuts.
The main reason for this fall would be recession fears in the US after President Donald Trump’s new reciprocal tariffs. Even though the tariffs themselves may not harm India directly, the bigger threat is the ripple effect, which involves a significant U.S. recession, lower Indian company profits, and lower investor confidence.
Sectors at Risk
Among sectors, metals are likely to be hit the hardest if tariffs are intensified due to their direct exposure to global prices and trade disruptions. Technology stocks could also see significant pressure, not just because of earnings risks but because their higher weight would have a bigger impact on the overall market. Furthermore, auto and chemical companies also seem to be in danger.
Policy changes Unlikely
Commenting on the fiscal policy, the firm said that the government is unlikely to bring major changes as easing both monetary and fiscal policy simultaneously could risk the country’s financial stability, especially when the global economy is uncertain.
Long Term Target
Despite all this, Emkay still believes that Nifty can rise to 26,000 in the long run. They’ve extended their long-term target timeline to March 2026 (from December 2025). This forecast is based on a revised FY27 Nifty EPS estimate of Rs 1,320 and a target valuation of 20x, in line with the long-term average.
Price Movement
A majority of the sectors traded in the red in Friday’s trading session. Nifty closed at 22,904.45, marking a 1.5 percent decrease or 346-point drop from the previous close. A key support zone seems to lie around 21,800 where buyers may step in. The RSI RSI stands at 45.93, slightly below the neutral 50 levels, suggesting that the market may be weak but not yet oversold.
Indian markets have shown milder losses compared to its global peers. The Nasdaq fell 6% overnight, Japan’s Nikkei slipped over 3%, and Australia’s ASX 200 declined 2.5%.
Written by Shwetha Sairam
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
