Reuters Poll Lowers Sensex and Nifty Forecasts for Third Time as Foreign Capital Shifts to AI-Driven Asian Markets
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Investors in the Indian stock market are navigating a shifting landscape as a recent Reuters poll reveals lowered estimates for domestic indices for the third consecutive quarter. While analysts emphasize that a major market crash is not on the horizon, the data indicates that India's benchmark indices may lag behind other regional Asian markets as foreign capital rotates toward technology- and AI-heavy economies.
Reuters Poll Projections and Limited Near-Term Upside
Surveying 28 equity analysts between August 13 and 26, the Reuters poll outlines cautious growth trajectories for domestic benchmarks. The Nifty 50 is projected to climb approximately 5% from its recent baseline to reach 25,556 by December 2026, followed by targets of 26,300 by June 2027 and 27,450 by December 2027. Similarly, the BSE Sensex is anticipated to hit 81,608 by the end of 2026, scaling to 85,700 by mid-2027 and 89,000 by year-end 2027.
These median estimates mark the lowest projections for end-2026 and mid-2027 since the polling series began. Market experts note that while the indices are expected to trend upward over time, the era of rapid, broad-based rallies has temporarily paused, pointing toward a selective, stock-specific environment where generating returns will require greater discernment.
Why is the Indian Market Lagging Behind Regional Peers?
The domestic market has faced a challenging run, declining over 7% through 2026 in what could shape up to be its softest annual performance in over a decade. This sluggishness contrasts sharply with surging markets in Japan, South Korea, and Taiwan, where heavy representation in semiconductors, electronics, and artificial intelligence (AI) has allowed those regions to ride the wave of global tech enthusiasm. Because India's major indices lack direct structural exposure to the global AI boom, international capital has increasingly gravitated toward tech-heavy alternatives or more attractively valued regional markets like Thailand, Malaysia, and the Philippines.
Strong Macro Fundamentals vs. Market Sentiment
The market correction occurs against a backdrop of robust macroeconomic indicators, including India's steady GDP growth hovering near 8% and a stellar 18% year-on-year profit surge for Nifty 50 companies in the June quarter—the fastest expansion in ten quarters.
Market analysts point out that when domestic indices underperform despite solid paper metrics, it reflects evolving global investor priorities. Foreign institutional investors (FIIs) have pulled approximately ₹2.4 lakh crore ($25.1 billion) from Indian equities through 2026, redirecting funds toward cheaper valuations and high-growth technology themes elsewhere in Asia. As corporate earnings, crude oil fluctuations, and global monetary conditions continue to dictate market direction, investors are advised to focus on fundamentals and selective growth opportunities.
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