Fresh from celebrating an unprecedented 10-year winning streak in 2025, Nifty bulls are eyeing double-digit gains with Dalal Street targets clustering around 29,000 for 2026. But beneath the optimism lurks a minefield of risks that could derail the party before it even begins.

"We believe there are quite a few as we head into the year 2026," warned Pradeep Gupta, Executive Director-Head of Investments India at Lighthouse Canton. "External shocks can create near to mid-term volatility, particularly geopolitical led distortions & US led slowdown in global growth cycle. Risks are more likely to emanate from exogenous sources."

Here are 7 threats that could spoil Nifty bulls' new year plans:

1) US-India Trade Deal Delay: The Ticking Time Bomb

Bank of America Securities flagged this as the most immediate threat: "We believe markets are already pricing a US-India trade deal. While we believe the trade deal announcement could happen soon, any delay in announcement beyond Jan-Feb'26 could disappoint markets and is a risk."

The stakes are high. BofA's base case expects India to attract 15% tariffs from the US eventually, in line with current market reactions. But the nightmare scenario, sustained tariffs at 25-50%, would trigger severe volatility.

"Any prolonged delay in the India-US trade deal would be a negative & can hamper overall market sentiment along with export momentum," Gupta added.

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2) Geopolitical Chaos: The Unpredictable Wildcard

Abhishek Jain, Head of Research at Arihant Capital Markets, identified political uncertainty as the elephant in the room: "The biggest risk to equity markets in 2026 is political uncertainty. Markets are forward-looking, but they're still not fully pricing in the global electoral volatility ahead. The US alone will face a pivotal election that could shift fiscal priorities, regulatory outlooks, and foreign policy - especially in areas like trade and tech."

3) AI Bubble Implosion: The Contagion Risk

The concentration in overheated AI-driven US tech stocks poses a systemic threat to global markets, including India.

"A significant correction in overheated AI-driven stocks globally might spill over, causing broader market correction including India," warned Gupta.

BofA elaborated on the spillover mechanics: "A sharp correction in US equity markets particularly driven by an unwinding of the AI led valuation bubble poses a meaningful risk for Indian equities as Indian markets are strongly correlated with US equity markets. Further, elevated positioning in AI-names and stretched multiples imply risks could spill over into global assets, triggering capital flight to safety and foreign outflows for EMs."