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JPMorgan's Rajiv Batra expects a subdued phase for emerging markets until late October, followed by an upsurge in Indian equities toward the Nifty's 27,000 base case from mid-November to end-January. He sees the bear case of 20,500 as less likely and expects mid-caps, small-caps and private banks to lead.
By Alpha Desk September 21, 2026, 10:52:22 AM IST (Published)
Rajiv Batra, Head of Asia and Co-Head of Global Emerging Markets Equity Strategy at JPMorgan, sees the Nifty moving towards the brokerage’s base case of around 27,000 between early or mid-November and the end of January. Speaking on the sidelines of the JPMorgan India conference in Mumbai, Batra said, “We anticipate there will be an upsurge into the year-end.”
Before that, however, Batra expects investors to remain cautious until late October or early November. He cited three factors behind the near-term caution: further rate hikes by developed-market central banks, rising Japanese bond yields and the seasonal slowdown in trading volumes ahead of the US midterm elections. Emerging markets also saw a small outflow last week, ending a 10-week run of inflows.
Batra said the chance of the Nifty falling to JPMorgan's bear case of 20,500 has come down. Bond markets already price in a further 70 basis points of rate hikes from the US Federal Reserve and the Bank of Japan (BoJ) by March. Oil prices also began to fall over the weekend.
He expects corporate earnings in the July-September quarter, the second quarter of the financial year 2026-27 (FY27), to draw investors back. Global earnings were strong last quarter, but markets fell as valuations adjusted to the change in interest rate policy. "If there is a weakness in end-October, early-November, that becomes a good opportunity for people who are on sideline to come back and join the bullish bandwagon," he said.
Growth is in midcaps and smallcaps
Batra said investors should look at the top 500 listed companies, not only the Nifty 50 or the BSE indices. More than 300 stocks now trade at least $10 million a day on average, which has drawn investors beyond large caps. Midcap and smallcap companies growing 20% to 40% are outperforming, he said.
Foreign ownership of largecap stocks has fallen from 24% to 16%, while midcap ownership rose from 9% to 12%. Smallcap ownership has stayed near 10% for 10 years. Largecap earnings are growing at 8% to 9% on a trailing basis, against 60% to 85% for North Asian peers, so Batra said large caps will struggle to challenge North Asia until growth reaches the high teens.
Sectors and themes
JPMorgan favours real asset sectors, meaning businesses that make or hold physical things: technology hardware, materials, industrials, hospitals and financials. Batra named grid capital spending, cables and wires, and transformers among the Indian ideas. He also named savers turning into investors, and said the 8th Pay Commission payouts will show whether households spend or invest.
Batra expects money to return to private banks after the Fed's first rate hike on September 16. He expects the Reserve Bank of India (RBI) to raise rates by 50 to 75 basis points, which would favour banks with large deposit bases. "This time private banks in India are not just growth opportunities, but it is also value opportunities," he said, adding that valuations are below two times price-to-book value, a level India has rarely seen in over three decades.
IT services have shrunk from about one-third of the MSCI India index to 6-7%, weighed down by AI-related price deflation and weak earnings. Batra sees financials, industrials and materials as India's top three sectors in future.
For the full interview, watch the accompanying video
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