Given the uncertain trade policy, rupee depreciation and relatively higher valuations will continue to post risks, Axis Securities has lowered the base case December 2025 Nifty target to 24,600.

The brokerage emphasised that the current level of India’s VIX is below its long-term average, indicating that the market is currently in a neutral zone. However, volatility in the short run prevails.

In bull case based on the Goldilocks scenario, which presumes an overall reduction in volatility and the success of a soft landing in the US market, Axis Securities has valued Nifty at 21x, at a target of ₹27,000.

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Meanwhile, in the bear case scenario, it values Nifty at 17x, translating into a December 2025 target of 22,000. Axis cited policy shift in the Trump regime & inflation would pose a challenge. “ Nonetheless, the direction of currency, oil prices, and development towards global trade is likely to put pressure on export-oriented growth in 2025. These developments will likely bring down the market multiple in the near term,” it added.

Valuations appear attractive for the large caps, according to the analysts. They believe that large-cap stocks, ‘quality’ stocks, monopolies, and market leaders in their respective domains may outperform the market in the near term. 

In addition, the brokerage has maintained its recommendations and favoured shares of HDFC Bank, ICICI Bank,Dalmia Bharat, State Bank of India, HCL Tech, Lupin, Trent, Hero Motocorp, Max Healthcare, Indian Hotels, Healthcare Global, Varun Beverages, Bharti Airtel, Cholamandalam Invest and Finance and Prestige Estates.

The analysts coined that the equity market is now stuck in an “oversold zone”, driven by US trade policies, rise in US dollar index and bond yields, a slowdown in domestic earnings growth and continued FIIs selling.

However, consumption boost in Union Budget, 50bps CRR cut in December 2024, 25 bps rate cut by RBI in Feb 2025, and improved liquidity measures would address domestic concerns.

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The market may continue its underperformance relative to emerging and developed markets for some more time, the report read. Nonetheless, the brokerage continues to believe in the long-term growth story of the Indian equity market.

In another report, Axis Securities analyst highlighted that Nifty has never recorded six consecutive months of decline.