Bank of America turns positive on Nifty, warns smallcap and midcap correction isn't over
CNBC-TV18 1 hr ago·26 Oct 2026, 5:17 am
Bank of America has shifted its stance on the Indian market, moving from caution to a positive outlook for the Nifty. This change follows more than two years of a cautious approach. However, the brokerage remains concerned about smaller companies. It suggests that the recent correction in smallcap and midcap stocks is not yet finished, as these segments remain overvalued.
For investors, this signals a potential shift in market leadership. While large-cap indices like the Nifty may stabilize, investors should be wary of the volatility expected in mid and small-cap segments. The bank also notes that foreign institutional investor (FII) selling is likely to slow down, which could support the broader market in the coming months.
Looking ahead, the report highlights specific sectors for long-term growth. Bank of America favors themes such as shipbuilding and precision manufacturing. Investors should monitor these themes while keeping a close watch on FII flows and the performance of mid and small-cap stocks to gauge the market's next move.
Excerpt from CNBC-TV18
Published On Oct 26, 2026 | 10:47 IST Last Updated On Oct 26, 2026 | 10:47 IST BofA Global Research has turned positive on the Nifty after more than two years of caution but continues to expect a deeper correction in smallcap and midcap stocks due to stretched valuations. The brokerage also sees FII outflows…Read the original at CNBC-TV18
Key takeaways
- Category: Economy.
- Flagged as a high-impact, market-moving story.
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