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Experts See Indian Equities Improving in FY27’s Second Half
Indian shares had a bumpy first half of FY27 and ended the period only slightly higher.
Experts think the next six months could be better if fighting and tensions in West Asia calm down.
That could bring oil prices down.
Cheaper oil may also reduce pressure on prices, borrowing costs and India's currency.
Foreign investors sold a lot of Indian shares during the first half, though they briefly returned in July and August.
Experts say strong businesses and spending at home could help support the market.
Banks, car companies and manufacturers may do well, while technology companies face uncertainty linked to artificial intelligence and new deals.
But high oil prices, inflation and a possible interest-rate increase could still cause trouble.
So experts are hopeful, but do not expect the path to be smooth.
The Sensex gained 0.74% and the Nifty 50 gained 1.29% from April to September.
Experts identify crude oil prices and the West Asia conflict as major variables for the second half of FY27.
Foreign investors withdrew a net Rs 1.30 lakh crore from Indian equities in the first half.
Domestic growth, credit activity and corporate fundamentals could help cushion global pressures.
Experts are cautiously optimistic but cite bond yields, inflation and other uncertainties as risks.
- Who
- Market experts including A Balasubramanian, Sunil Singhania, Pankaj Pandey and Rajkumar Rathi.
- What
- They expect Indian equities could fare better in the second half of FY27, while warning that risks remain.
- Where
- Indian equity markets.
- When
- The outlook covers the second half of FY27, following April-September.
- Why
- Easing West Asia tensions and lower crude prices could reduce pressure on inflation, bond yields, the rupee and foreign investor flows.
Reasons for Cautious Optimism
Risks That Could Restrain Markets
Crude oil and West Asia conflict
Reasons for Cautious Optimism
Several experts expect tensions to ease, which could lower crude prices, volatility and pressure on Indian equities.
Risks That Could Restrain Markets
Crude remains the biggest market variable; if prices stay high, bond yields, currency pressure and market strain could persist.
Domestic strengths and external risks
Reasons for Cautious Optimism
Experts point to domestic growth, corporate fundamentals, credit growth and potential earnings strength as support for equities.
Risks That Could Restrain Markets
Higher bond yields, a possible Reserve Bank of India rate hike, El Niño and inflation could weigh on markets.
Foreign investor flows
Reasons for Cautious Optimism
A fall in crude prices could ease inflation, yield and currency pressures and make Indian equities more attractive to foreign investors.
Risks That Could Restrain Markets
Foreign investors withdrew a net Rs 1.30 lakh crore in the first half, and flows remain sensitive to global conditions and currency movements.
Key facts
- Period covered
- First and second halves of FY27
- BSE Sensex, April-September
- Rose 0.74%
- Nifty 50, April-September
- Rose 1.29%
- Net foreign equity outflows
- Rs 1.30 lakh crore in the first half of FY27
- Estimated geopolitical premium on crude
- About $15-20 a barrel, according to Sunil Singhania
- Potentially supported sectors
- Financial services, banks and NBFCs, automobiles and manufacturing
- Market outlook
- Cautious optimism, conditional on easing geopolitical pressures
Quotes
Pankaj Pandey
Head of research at ICICI Securities
“If crude prices remain high, bond yields will stay high, creating pressure on currency and the markets.”
financialexpress.com
Sources
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