Following a sharp 5% decline over the last three trading sessions, domestic brokerage Emkay Global Financial Services has turned bullish, projecting a 5% rebound for the Nifty 50. The optimistic outlook stems from signs of de-escalation in West Asia after U.S. President Donald Trump announced a temporary pause in airstrikes against Iran, providing much-needed relief to global markets.
Emkay maintains its December 2026 Nifty target of 29,000, viewing the recent correction as a “bottoming out” phase rather than a long-term bearish trend.
Top 5 Stocks to Lead the Recovery
Emkay has identified specific stocks that were “over-corrected” during the recent panic and are now positioned for a sharp bounce-back:
| Stock | Recent Correction | Rationale for Recovery |
| Ashok Leyland | -23% | Beaten down on diesel hike fears; valuations now highly attractive. |
| Larsen & Toubro (L&T) | -22% | Sharp fall despite 95% of Middle East operations remaining unaffected. |
| InterGlobe Aviation (IndiGo) | -18% | Expected recovery as ATF (fuel) prices cool and flight schedules normalize. |
| HDFC Bank | -16% | Market overreaction to Chairman’s resignation; currently trading at a low PBV. |
| Bajaj Finance | -16% | Minimal impact on core earnings; poised for a quick rebound as risk appetite returns. |
Market Triggers & Outlook
- Crude Oil Easing: Emkay expects Brent crude to retrace to $75–$80 per barrel as geopolitical clarity emerges.
- FPI Reversal: While Foreign Portfolio Investors (FPIs) pulled out $2.5 billion recently, the brokerage expects this trend to reverse as India remains a preferred investment destination.
- Currency & Bonds: The Indian Rupee is expected to recover toward Rs 91/USD, while the 10-year bond yield could ease to 6.65%.
Note: Emkay also cautioned that “protection trades” like IT, Reliance, and ONGC might see a relative downside as investors shift funds back into high-growth, beaten-down sectors.
