BofA sets Nifty 26,200 warns West Asia crisis, AI investment
India's economic future is closely tied to how the West Asia crisis unfolds and how much the world invests in artificial intelligence (AI), according to Bank of America.
Candace Browning from BofA Global Research set a year-end Nifty target of 26,200 but cautioned that ongoing geopolitical tensions could hurt India's market performance and put extra pressure on government finances.
BofA warns Indian stocks may underperform
Browning pointed out that Indian stocks might underperform compared to bigger emerging markets for now, unless there are more structural reforms and broader growth.
She highlighted that once AI capex peaks, its real impact will show up over the next couple of years.
She also noted tech demand is fueling growth in North Asia while a strong US dollar means the rupee could keep losing value.
With US inflation still high, don't expect any interest rate cuts from the Federal Reserve this year either.