Axis Securities Forecasts Nifty 50 Target of 24,600 Amid Trade War Tensions: Essential Market Strategy for Investors

In the wake of a promising rebound in March, Indian stock markets faced a challenging downturn in April, primarily due to growing concerns over a potential global trade war. According to insights from Axis Securities, both the Nifty and Sensex indices plummeted by nearly 5% during this period, signaling a stark shift from the previously optimistic sentiment.

Trade Tensions Trigger Market Decline

The sharp decline in the Indian equity markets was precipitated by the United States imposing reciprocal tariffs on imports from over 180 countries, including major partners like China and India. On April 2, President Donald Trump announced these tariffs, aiming to bolster American manufacturing. However, this move quickly backfired as China retaliated with a 34% tariff on American goods. Axis Securities highlighted that this escalating trade conflict between the two largest global economies could have extensive ramifications for investor sentiment and international financial markets.

“The intensification of trade disputes may not just be a temporary setback; it could signal the start of a prolonged trade war that adversely impacts global growth trajectories,” the brokerage warned.

Large-Cap Stocks Present Attractive Opportunities

Despite the market correction, Nifty valuations remain relatively stable. At present, the index is trading around 19 times its projected earnings over the next twelve months, just above its five-year average of 18.8 times. Axis Securities emphasized that while the broader market isn’t overly inflated, large-cap stocks present a more favorable risk-to-reward ratio.

Investors are encouraged to consider:
- Quality companies
- Market leaders
- Monopolistic firms with strong earnings visibility

Navigating Uncertainty with Sector Rotation

In its April market outlook, Axis Securities underscored that macroeconomic factors—such as trade policy uncertainty, U.S. bond yield trends, and dollar strength—will significantly influence market movements in the near term. They anticipate ongoing market consolidation with limited participation breadth.

To adapt to these conditions, Axis Securities has implemented a sector rotation strategy. They recommend focusing on domestic-facing sectors such as:

Private sector banks
Telecom
Consumer goods
Healthcare
Interest-rate sensitive industries

These sectors are expected to perform well, largely insulated from global trade tensions and poised to benefit from strong domestic demand.

Conversely, export-driven sectors may face hurdles due to uncertainties in the global landscape and could adopt a cautious approach.

Nifty Target and Earnings Growth Forecast

Axis Securities has set a base case Nifty target of 24,600 by December 2025, reflecting a valuation of 19 times projected FY26 earnings. This outlook is supported by an anticipated 14% compound annual growth rate (CAGR) in earnings from FY23 to FY27, predominantly driven by the financial sector.

The brokerage remains optimistic about India’s economic prospects, bolstered by a favorable policy environment, increasing capital expenditures, and robust credit growth fueled by the Union Budget. “India holds strong potential as a stable investment haven amid global volatility,” stated Axis Securities, projecting double-digit returns for Indian equities over the next 2–3 years.

Bull and Bear Scenarios for Market Outlook

In a bullish scenario, Axis Securities estimates Nifty could reach 27,000, assuming a favorable environment characterized by a smooth U.S. economic landing, political stability in India, a resurgence in private capital expenditure, and strong global liquidity. On the flip side, their bearish outlook places Nifty at 22,000, reflecting a scenario fraught with potential policy shifts under the Trump administration, persistent inflation in developed markets, and volatility in currencies and commodities.

Resilient Stock Selections

In alignment with their strategic approach, Axis Securities has identified several stocks that demonstrate strong fundamentals and robust domestic growth potential. Noteworthy recommendations include: