Nifty’s break above 26,300 could take it to 28,800: CLSA’s Laurence Balanco

Laurence Balanco of CLSA believes the near-term story for India is one of consolidation, but with a powerful opportunity building in the mid-cap space. While the benchmark Nifty is currently trading in a well-defined range between 25,300 and 26,300, Balanco said a decisive break above 26,300 would open up targets of 27,800 and subsequently 28,800.His stronger conviction, however, lies with mid-caps. “We’ve been consolidating there for nearly 24 months, and I think a meaningful break through the 62,000 area for the midcap space gives us upside of over 30%,” he said, adding that the NSE Midcap Select index has already cleared the upper boundary of its consolidation pattern.

Looking beyond India, Balanco described 2026 as having a “boom-bust structure” for Asian markets. He expects the first half of the year to be dominated by a boom in tech-heavy North Asian markets such as Korea and Taiwan, which could temporarily attract flows away from India.

However, he believes this leadership will reverse in the second half of the year, as those markets roll over and India comes out of the shadow, allowing Indian equities — especially mid-caps — to regain momentum.

This regional outlook is reinforced by a constructive view on commodities. Balanco said base metals began breaking out in late 2025, a trend he expects to continue through 2026. He sees aluminium heading towards $3,500 and LME copper futures moving above $16,000. In precious metals, while he is cautious on silver after its sharp rally, he remains bullish on gold, with an unmet measured target in the $5,100 to $5,200 zone.

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In contrast, Balanco is more restrained on US markets. He expects the S&P 500 to continue underperforming the rest of the world in 2026, noting that midterm election years in the US are typically weaker and marked by higher volatility between April and October. While he sees scope for a Q1 run-up towards 7,400 on the S&P 500, he believes the broader theme will remain better relative performance from emerging and global equities.

Underpinning all these views is Balanco’s strong conviction that the US dollar has entered a major bear market. He pointed to the Dollar Index breaking below the critical 100 level as confirmation of a major top formed between 2022 and 2025. “The break below 100 suggests that we now have a major dollar top in place,” he said, adding that this opens up a downside target of 89 to 90 on the DXY — another 10% fall from current levels. Drawing on historical cycles since the 1970s, Balanco said dollar bear markets typically last five to seven years and can result in declines of 40–50%, suggesting the current weakness may only be the beginning.

Also Read: Chola Securities backs PSU banks, cautious on private lenders and midcap cement

For the entire interview, watch the accompanying video

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