Goldman Sachs has raised its target for India’s benchmark Nifty index to 29,000, citing expected earnings upgrades of three to four per cent and a supportive policy backdrop, even as banking-system liquidity remains in deficit.
The brokerage said profit forecasts for Indian companies were likely to be revised upward as demand holds up and input costs stay contained, according to reports of the research note. Index targets from global brokers are closely watched by foreign investors, whose flows have been a swing factor for Indian equities this year.
At the same time, the net liquidity deficit in the banking system widened to ₹2.34 lakh crore, reflecting tax outflows and currency demand. A deficit of that size usually puts upward pressure on short-term borrowing costs and keeps the central bank active through fine-tuning operations.
Reserve Bank of India governor Sanjay Malhotra has meanwhile urged banks and payment firms to speed up how fraud alerts travel through the UPI ecosystem. Speaking on the risks facing instant payments, he said alerts about suspicious transactions need to move along the chain faster so that funds can be frozen before they are layered through multiple accounts.
UPI, which processes billions of transactions a month, has become central to India’s retail payments, and regulators have been pushing for stronger real-time fraud checks as volumes grow. Industry executives say the challenge is to add friction for criminals without slowing legitimate payments for ordinary users.
Market participants said the combination of an upgraded index target and a still-tight liquidity position captures the current mood: optimism about earnings over the medium term, matched by caution about near-term funding conditions. Treasury desks expect the central bank to keep liquidity operations active in the coming weeks to smooth government cash flows.
Dealers said the liquidity position would bear watching through the advance-tax season, when corporate outflows typically tighten overnight rates further. Money-market participants expect the central bank to lean on variable-rate operations to keep call rates near the policy rate without loosening its overall stance.
