Nifty Eyes 28,800 Target in FY26: Financials, IT, and Infra Sectors Offer Bright Prospects

The Nifty 50 has made a strong comeback, rallying more than 12% from its April low of 21,744 to touch an intraday high of 24,359 on April 23. This sharp surge mirrors the post-COVID rally seen in 2020, fueled mainly by robust performances from the banking and financial services sector — the heavyweight of the Nifty 50.

After an impressive climb of around 7,000 points from the April lows, the banking sector took a pause, while the technology sector stepped up on April 23, registering a notable 4% jump and pushing the Nifty higher for the seventh consecutive session.

Technically, the index has already retraced 50% of the decline from its September 2024 highs to the April 2025 lows and now looks set to approach the 61.8% retracement level at 24,545.

According to ICICI Direct, this is just the beginning of a broader bullish phase. With easing tariff concerns and improved domestic economic fundamentals, the Nifty is projected to hit 25,500 in the next few quarters, ultimately reaching 28,800 before FY26 ends.

“Our analysis indicates that most negative news is already factored into the market, which has now established a strong base between 21,900 and 23,800. This sets the stage for an upward journey,” ICICI Direct’s technical experts noted.

The current rally is backed by improving market breadth and sentiment indicators. Notably, foreign institutional investors (FIIs) have been consistent net buyers over the past six sessions, investing over ₹21,264 crore, which has helped dilute previous market negativity.

Historically, such setups have delivered an average 23% return over the following year. Thus, ICICI Direct recommends using market dips to accumulate quality stocks for medium-term portfolio building.

Adding further optimism, weakening trends in the US Dollar Index, cooling Brent crude oil prices, and a decline in the S&P 500 VIX all favor emerging markets like India. The US Dollar Index saw a significant dip from a January high of 110.176 to 97.921 in April, while Brent crude hit a four-year low at $62.82 a barrel.

The midcap and smallcap indices have also shown solid recovery. The Nifty Midcap 100 index, after a 23% correction from its September 2024 peak, has bounced back 17% from the April lows. Similarly, the Smallcap 100 index recovered 21% after falling 28.6% from its December 2024 high.

Sector-wise, ICICI Direct suggests a focus on domestic plays. Financials are expected to maintain leadership, supported by PSU banks, Metals, Telecom, Pharma, and Consumer sectors. Additionally, IT, Capital Goods, and Infrastructure sectors now offer a favorable risk-reward profile for investors.