BSE SMALLCAP SELECT

Indian equity benchmarks, the BSE Sensex and Nifty 50, are likely to open lower on April 6, tracking losses in GIFT Nifty, which was trading around the 22,672.50 level.

Track the latest updates on GIFT Nifty right here on Moneycontrol.

In a highly volatile session on April 2, the Indian market ended on a positive note, with the Nifty closing above 22,700, supported by IT stocks after the Indian rupee posted its biggest gain in more than 12 years.

At close, the Sensex was up 185.23 points or 0.25 percent at 73,319.55, and the Nifty was up 33.70 points or 0.15 percent at 22,713.10.

Here is how financial markets across the globe fared overnight:

GIFT Nifty (Down)

GIFT Nifty was trading lower at the 22,672.50 mark, indicating a negative start for Indian equity indices.

Asian Equities (Jump)

Japan and South Korean stocks rose Monday, while most Asian markets were closed for holidays, as investors parsed the latest developments in the Middle East conflict over the weekend.



US Equities (Mixed)

U.S. stocks ended ​slightly mixed on Thursday after paring deeper losses, as diplomatic signals from the Middle East helped calm markets rattled ‌earlier by U.S. President Donald Trump's threats of tougher action against Iran ahead of a long holiday weekend.

The Dow Jones Industrial ​Average fell 0.13%, to 46,504.67 points, the S&amp;amp;P 500 gained 0.11% to 6,582.69 points, and the Nasdaq Composite gained 0.18%, to 21,879.18.

For the week, the S&amp;amp;P 500 gained 3.36%, the Nasdaq rose 4.44%, and the Dow climbed ‌2.96%. The ⁠Russell 2000 small-cap index rose 3.19%.



Dollar Index (Up)

The dollar was steady on Monday, while the yen flirted with the crucial 160 per dollar level as nervous investors took stock of the escalating Iran war, with all eyes on the latest deadline from U.S. President Donald Trump to reopen Strait of Hormuz.



US Bond Yield (Up)

The yield on the U.S. 10-year Treasury bond was up 1.7 basis points at 4.35%, and the 2-year U.S. Treasury rose 2.2 basis points at 3.86%.



Asian Currencies (Mixed)

Asian currencies were trading mixed in the early trade on Monday, with the Singapore Dollar, Taiwan Dollar, Philippines Peso leading the losers. At the same time, gainers included South Korean Won, Thai Baht, China Renminbi, and Indonesian Rupiah.



Crude (Up)

Oil gained as President Donald Trump imposed a fresh ultimatum on Tehran and threatened to strike power plants and other civilian infrastructure in Iran if the Strait of Hormuz is not reopened.



Gold (Slips)

Gold and Silver prices were trading lower in the early trade on Monday.



Fund Flow Action

Foreign Institutional Investors (FIIs) extended their selling streak, offloading equities worth ₹9,931 crore on April 2. However, Domestic Institutional Investors (DIIs) provided support, purchasing equities worth over ₹7,200 crore.



Hope you're all set for today's trade. We wish you a profitable day ahead.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

First Tick: Top global cues to watch in today’s trade

Sensex Today | Stock Market LIVE Updates: U.S. stocks ended ​slightly mixed on Thursday after paring deeper losses, as diplomatic signals from the Middle East helped calm markets rattled ‌earlier by U.S. President Donald Trump's threats of tougher action against Iran ahead of a long holiday weekend.

Sensex Today | Stock Market Live: GIFT Nifty hints a negative start; Asian markets rally

If Iran conflict reaches definitive resolution this month, FY27 to be exceptionally strong year for Indian equities, Q1FY27 may still see turbulent sideways consolidation before sustained rally, Overall bank asset quality remains near multi-decade lows, NBFCs continue to be broadly capitalised

* If Iran conflict reaches definitive resolution this month, FY27 to be exceptionally strong year for Indian equities
* Q1FY27 may still see turbulent sideways consolidation before sustained rally
* Overall bank asset quality remains near multi-decade lows, NBFCs continue to be broadly capitalised

shorts/business/daily-voice-indian-equities-could-rally-into-fy27-if-iran-conflict-ends-this-month-says-waterfield-s-vipul-bhowar

According to Vipul Bhowar, the Senior Director, Head of Equities, Waterfield Advisors, if the Iran conflict reaches a definitive, verifiable resolution this month, fiscal year 2027 is well-positioned to be an exceptionally strong year for Indian equities.

The transition from panic to recovery is expected to be volatile, implying that the first quarter of FY27 may still see turbulent sideways consolidation before a sustained rally, he said in an interview to Moneycontrol.

However, he added that if the ongoing conflict extends into the first quarter of fiscal year 2027 (April to June), there is likely to be a structural energy shock, systemic supply chain paralysis, and a significant recalibration of global growth. During the fourth quarter earnings season, management commentaries are expected to adopt a universally cautious tone, he said.

Do you believe FY27 will be a strong year for equity markets if the Iran conflict sees a definitive resolution this month?

Yes, if the Iran conflict reaches a definitive, verifiable resolution this month, Fiscal Year 2027 is well-positioned to be an exceptionally strong year for Indian equities. The recent decline was attributable solely to external macroeconomic shocks rather than to a domestic microeconomic breakdown.

The transition from panic to recovery is expected to be volatile, implying that the first quarter of FY27 may still see turbulent sideways consolidation before a sustained rally. The March correction effectively eliminated the inflated valuations observed at the end of calendar year 2025. Currently, the markets are at considerably more reasonable entry points.

Have you made any significant revisions to your earnings, economic growth, and inflation estimates amid the ongoing war?

The growth outlook for India Inc. remains largely stable owing to robust GDP figures; however, operating margins are being substantially downgraded for the first half of fiscal year 2027. Margin projections for sectors such as oil derivatives and import-dependent industries—including paints, FMCG, aviation, and agrochemicals—may be adversely affected.

Conversely, earnings forecasts for domestically oriented banks are relatively resilient, buoyed by strong credit growth. Meanwhile, the IT and pharmaceutical sectors are experiencing modest upward revisions amid the rupee's depreciation.

The Reserve Bank of India currently projects FY26 inflation at 4.2%, while explicitly acknowledging upward pressure, primarily from precious metals and geopolitical uncertainties. It remains evident that India's domestic momentum, driven by state capital expenditure and robust consumer demand, is sufficiently vigorous to counterbalance geopolitical headwinds, although the safety margin has clearly diminished.

Do you see the possibility of a strong reversal in FII flows if the war ends in April?

In the event that we observe a conclusive resolution to the Middle Eastern conflicts in April, a significant and pronounced reversal in foreign institutional investment (FII) flows is highly likely. Currently, we are witnessing a structural global shift as foreign investments are actively reallocating capital towards the global artificial intelligence and semiconductor hardware sectors, specifically in companies such as TSMC, Samsung, and SK Hynix based in Taiwan and South Korea.

Given that India's capital markets are presently more focused on IT services and less on deep-tech hardware, a portion of the capital being withdrawn may migrate structurally to East Asia rather than returning entirely to the Indian markets.

Have you identified compelling investment opportunities in the recent sharp sell-off?

The defence manufacturing sector, power generation and transmission, and capital goods industries are currently benefiting from sustained multi-year visibility in their order books, largely driven by government Production-Linked Incentive (PLI) schemes and an emphasis on achieving self-reliance in manufacturing.

Furthermore, the fundamental microeconomic indicators for large-cap private banks remain exceptionally strong. Credit growth is robust, and gross non-performing assets (NPAs) are at their lowest levels in several years.

Do you expect any policy measures from the RBI in this week's meeting?

The Reserve Bank of India (RBI) is expected to demonstrate its ability to manage liquidity, facilitate credit flows, and ensure market stability through targeted, non-rate measures while awaiting a resolution of the current geopolitical uncertainties.

RBI will unanimously hold the policy repo rate unchanged at 5.25 percent and explicitly maintain its neutral stance. Given that the inflation target for the fiscal year 2026-27 was previously established at approximately 4.0 percent to 4.3 percent, one should expect the RBI to formally recognise significant upside risks. There may be a cautionary note about the risk of inflation approaching the 5 percent threshold, particularly if the conflict in the Middle East continues to escalate.

Do you think the rupee needs to depreciate meaningfully for India’s growth as a manufacturing hub?

Currency stability is fundamental to the allocation of foreign corporate capital. A stable Indian Rupee (INR) significantly reduces offshore borrowing costs for Indian manufacturers seeking to expand their capacities.

The real opportunities for growth in India’s manufacturing sector over the course of this decade will arise from companies that strategically work to reduce costs, benefit from Production-Linked Incentive (PLI) subsidies, establish robust domestic supply chains, and enhance their global market share through operational excellence and scale.

Do you see pressure on asset quality across banks and NBFCs driven by rising retail NPAs?

While there is some pressure on asset quality, it appears to be contained rather than indicative of systemic concern. The stress is primarily concentrated in unsecured retail products such as personal loans, credit cards, and microfinance.

Meanwhile, overall bank asset quality remains near multi-decade lows, and NBFCs continue to be broadly capitalised.

What could be the potential impact on markets, economy, earnings, globally if the West Asia war continues through April, May, or June, particularly amid rising fears of an Iran ground invasion? Could you explain the depth of the impact on a month-wise basis?

If the ongoing conflict extends into the first quarter of fiscal year 2027 (April to June), we are likely to experience a structural energy shock, systemic supply chain paralysis, and a significant recalibration of global growth. During the fourth quarter earnings season, management commentaries are expected to adopt a universally cautious tone. Forward guidance for the following quarter will likely be rescinded or substantially downgraded as companies recognise their inability to accurately predict input costs.

In May, a flight to safety can be anticipated. Global equities can undergo widespread selling, while the US Dollar and gold can appreciate significantly. The Middle East, a major exporter of fertilisers (such as ammonia and urea), petrochemicals, and industrial metals, will confront secondary supply shocks resulting from a prolonged blockade. For India, this scenario entails a sharp increase in raw material costs just ahead of the critical Kharif sowing season, which will drive up agricultural input costs and pose a threat to food inflation.

By June, topline revenue estimates will finally begin to deteriorate for corporates. This will no longer be solely an issue of margins; companies will encounter volume contractions as consumer demand wanes both globally and domestically. Global central banks, including the US Federal Reserve, will be compelled to abandon any residual expectations of interest rate cuts and may even consider increases to combat wartime-induced inflation.

Further, the Reserve Bank of India, which had previously maintained a stance of &quot;prolonged pause,&quot; may find it necessary to implement defensive rate hikes or enforce stringent liquidity tightening measures to safeguard the Rupee and stabilise inflation expectations. This would likely trigger a broad-based contraction in valuation multiples across Indian equities, including resilient domestic sectors.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.

Daily Voice: Indian equities could rally into FY27 if Iran conflict ends this month, says Waterfield’s Vipul Bhowar

Coming week expected to remain weak with elevated volatility, Market needs concrete news development with respect to de-escalation of war and opening of Strait of Hormuz for trend reversal, Focus on RBI policy, corporate earnings season, US GDP and inflation, FOMC minutes, China inflation

* Coming week expected to remain weak with elevated volatility
* Market needs concrete news development with respect to de-escalation of war and opening of Strait of Hormuz for trend reversal
* Focus on RBI policy, corporate earnings season, US GDP and inflation, FOMC minutes, China inflation

shorts/business/dalal-street-week-ahead-rbi-policy-iran-war-oil-prices-us-gdp-q4-earnings-among-10-key-factors-to-watch

The market stayed under the severe selling pressure for sixth consecutive week, falling around half a percent for the week ended April 2 and losing over 11 percent in last six weeks as bears are not letting the charge of Dalal Street despite intermittent attempt of bulls. Trump's renewed threat to strike Iran extremely hard, rising US Treasury yields, stronger dollar, Brent crude above $100 per barrel revived imported inflation fears and India's Manufacturing PMI at four-year low weighed the market down, though the rupee recovered sharply on RBI measures.

The coming week starting from April 6 is also expected to remain weak with elevated volatility until there is a concrete news development with respect to de-escalation of war and opening of Strait of Hormuz. In between, the week ahead is also loaded with high-impact triggers across global and domestic fronts including the RBI monetary policy, start of corporate earnings season, US GDP and inflation, FOMC minutes, and China inflation numbers, according to experts.

The BSE Sensex fell 264 points (0.36 percent) during the week to 73,320, and the Nifty 50 slipped 107 points (0.47 percent) to 22,713, while the Nifty Midcap 100 index was down 0.78 percent and the Nifty Smallcap 100 index gained 0.2 percent. Selling was widespread across all sectors, with IT being the lone exception

&quot;So long as Middle East remains a live powder keg, markets will continue to trade on headlines rather than fundamentals, keeping volatility elevated and directional clarity elusive,&quot; Vinod Nair, Head of Research at Geojit Investments said.

Siddhartha Khemka, Head of Research, Wealth Management at Motilal Oswal Financial Services also agreed with Vinod Nair saying overall, market sentiment remains fragile and depends on the developments in the US–Iran conflict, with crude oil prices and foreign fund flows expected to remain key drivers of market direction in the near term.

Here are 10 key factors to watch next week:

West Asia War and Oil Prices

The ongoing West Asia conflict, elevated oil prices, and their impact on global economies and corporate earnings will be the most important factors to watch globally. The United States and Israel continue to carry out strikes on Iran, which has led to the blocking of the Strait of Hormuz—a crucial waterway responsible for transporting around 20 percent of the global oil supply. On the other hand, Iran has been retaliating by targeting Israel and other parts of the Middle East, including U.S. bases.

Donald Trump has issued a harsh warning of severe military action targeting critical infrastructure if Iran fails to reopen the Strait of Hormuz. However, with Iran rejecting the 48-hour ceasefire proposal from the United States and signaling a harder stance, geopolitical tensions are likely to remain the dominant driver of risk sentiment in the near term.

Meanwhile, according to CNN reports, representatives from Oman and Iran have met to discuss “possible options” for allowing ships to pass through the Strait of Hormuz. More than 180 ships have successfully transited the strait since the outbreak of the conflict, compared to around 140 ships that used to pass through the strait daily.

Brent crude prices, the international benchmark for oil, have remained above the $100-per-barrel level for four consecutive weeks, with all key moving averages trending upward. Prices ended 2.78 percent higher for the recent week at $109.23 per barrel, as markets are pricing in a growing risk of sustained supply disruptions, particularly around the Strait of Hormuz.

Global Economic Data

Globally, apart from geopolitical tensions and elevated oil prices, the market participants will also focus on the FOMC minutes, and the economic releases like weekly jobs data, quarterly GDP growth &amp;amp; Core PCE prices, and inflation for March from the United States for further clues on the Fed policy outlook.

In March meeting, the Federal Reserve kept the fed funds rate unchanged at 3.5-3.75 percent with policymakers still expecting one more rate cut in current year and another in 2027. But most economists are not expecting any rate cut given the escalated geopolitical tensions and fear of inflation concerns with rising oil prices, rather there is a possibility of rate hike.

US GDP growth for Q4-CY25 is likely to be sharply lower from 4.4 percent seen in Q3, while the inflation is expected to inch higher for March from 2.4 percent in February.

Meanwhile, inflation and PPI numbers for March from China will also be watched next week.



RBI Monetary Policy

Back home, the Reserve Bank of India Monetary Policy Committee (RBI MPC) will conclude its three-day monetary policy meeting on April 8 with likely maintaining status quo on repo rate at 5.25 percent and 'neutral' policy stance. The Governor's commentary on the rate cycle trajectory and FY27 projections will be closely monitored. In fact, now most economists expect no rate cut at least in current financial year but rather there is a possibility of rate hike in the range of 25-50 bps considering escalated geopolitical tensions in the Middle East and elevated oil prices.

In the commentary, the RBI is likely to maintain a balanced stance, acknowledging external risks while focusing on domestic stability. The emphasis will be on inflation trajectory, liquidity management, and currency stability. Rather than signaling aggressive policy shifts, the central bank is expected to retain flexibility and respond as conditions evolve, said Puneet Sharma of Whitespace Alpha.

Q4 Earnings

The much-awaited March 2025 quarter earnings season will kick off next week by Tata Consultancy Services on April 9. On the same day, Anand Rathi Wealth, and GM Breweries will also release their quarterly numbers.

According to experts, the Q4FY26 is expected to be a relatively mixed quarter with certain sectors likely face margin pressures due to higher input costs (especially after spike in oil prices in March due to Middle East tensions) and currency volatility, while others could continue to benefit from stable demand conditions. The impact of March volatility is more likely to reflect in management commentary, forward guidance, and cautious outlooks rather than sharply in reported numbers.

Domestic Economic Data

On the economic data front, HSBC Services PMI final data for March is scheduled on April 6. According to preliminary numbers, the services PMI dropped to 57.2 in March from 58.1 in previous month, partly impacted by geopolitical tensions in the Middle East which raised inflation concerns and affect international travel activity.

Further, bank loan and deposit growth for fortnight ended March 20, and foreign exchange reserves for week ended April 3 will be released on April 10. The forex reserves have been declining since the beginning of March especially after the onset of the West Asia conflict, down by US$10.288 billion to US$ 688.06 billion in the week ended March 27 from US$698.4 billion. It dropped US$40.43 billion from record high of US$728.49 billion at the end of February amid RBI's intervention by selling dollar to stabilise the weakening rupee.

Indian Rupee

The movement in rupee, which has come under pressure since the start of the West Asia conflict followed by its sharp recovery last week, will also be watched in the coming week.

The currency consistently depreciated from a level of 90.50 against the US dollar in the second week of February to hit a record low of 95.225 on March 30 due to persistent withdrawal of foreign capital, and rising crude oil prices amid geopolitical tensions in the West Asia, before showing sharp recovery of 2.68 percent in the last five straight sessions (from all-time low) especially after the Reserve Bank of India announced several measures to restrict banks from onshore forward markets. The rupee closed at 92.67 a dollar, appreciating 2.2 percent during the week passing by.

But Jateen Trivedi, VP Research Analyst - Commodity and Currency, LKP Securities believes this recovery appears more of a technical pullback after sharp depreciation rather than a trend reversal. &quot;Uncertainty remains elevated, keeping volatility high in currency markets.&quot;

FII Flow

The market will also keep an eye on the mood of Foreign Institutional Investors (FIIs) which remained negative. They net sold more than Rs 29,000 crore worth shares last week, becoming consistent sellers from February 26 offloading total shares worth over Rs 1.5 lakh crore in 23 straight sessions, as per provisional data. In March, their outflow was over Rs 1.22 lakh crore, the biggest-ever in a month, amid oil prices trading above $100 a barrel, continuation of war in the Middle East and dollar appreciation.

The US dollar index closed above 100 mark for the second consecutive week, closing 0.01 percent down for the recent week and maintaining above 50-week EMA for fourth straight week but is yet to reclaim 100 and 200-week EMA.

According to experts, as long as the oil prices remain elevated amid escalation in the West Asia war, the FPI flow may remain on the negative side, and the rupee is expected to be fundamentally weak.

On other side, Domestic Institutional Investors (DIIs) consistently provided strong support to equities, almost offsetting FII outflow in recent week and buying nearly Rs 1.75 lakh crore from February 26.

IPO Action

Meanwhile, the major action is unlikely in the primary market for second consecutive week as only two initial public offerings (IPOs) - one each in the mainboard and SME - are set to hit Dalal Street next week, largely impacted by the cautious mood of the secondary market. Propshare Celestia's Rs 245-crore public issue will open on April 10, while the subscription for Rs 48-crore SME offer by Safety Controls &amp;amp; Devices will start on April 6.

Emiac Technologies' public issue will remain open till April 8, while Vivid Electromech will be the only company making debut next week on April 7 after IPO.

Technical View, F&amp;amp;O Cues, India VIX

Technically, the setup remains in favour of bears as the selling pressure at higher levels remains strong than there was buying at lower levels, with the Nifty 50 trading well below all key moving averages with bearish signal from momentum indicators. In fact, the index reached closer to 200-week EMA with continuation of lower high-low formation. The recent week's low of 22,182 is expected to be immediate key support for the index, however, the 23,000 is likely to be crucial hurdle on the higher side as decisively breaking either of levels can give further direction.

The weekly options data suggested that the Nifty 50 is expected to be in the 22,000-23,000 range in the upcoming sessions. The maximum Call open interest was seen at the 23,000 strike, followed by the 23,500 and 23,200 strikes, while the 22,000 strike holds the maximum Put open interest, followed by the 22,500 and 22,300 strikes. The maximum Call writing was observed at the 23,000, 23,200 and 22,200 strikes, while the 22,000, 22,300 and 22,200 strikes saw maximum Put writing.

Meanwhile, the fear gauge India VIX sustained at elevated zone despite 4.8 percent fall to 25.52 zone after 98 percent surge in previous four straight weeks, signalling major discomfort for bulls. It is necessary for the volatility index to convincingly fall below 20 level for the bulls to start getting back into comfort zone.

Corporate Action

Here are key corporate actions taking place in the coming week:



Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.

Dalal Street Week Ahead: RBI policy, Iran war, oil prices, US GDP, Q4 earnings among 10 key factors to watch

See emerging opportunities in sectors linked to domestic consumption, financials, and segments of industrials, At least under current situation, opportunity set is selective rather than broad-based, Principal challenge for FY27: Continued geopolitical uncertainty and its impact on risk sentiment

* See emerging opportunities in sectors linked to domestic consumption, financials, and segments of industrials
* At least under current situation, opportunity set is selective rather than broad-based
* Principal challenge for FY27: Continued geopolitical uncertainty and its impact on risk sentiment

shorts/business/daily-voice-anand-rathi-s-pradeep-gupta-spots-opportunities-in-consumption-financials-and-industrials-urges-selective-bets

In the current sharp fall, Pradeep Gupta, the Chairman &amp;amp; MD at Anand Rathi Share &amp;amp; Stock Brokers sees emerging opportunities particularly in sectors linked to domestic consumption, financials, and segments of industrials where order books and balance sheets remain robust.

However, at least under the current situation, the opportunity set is selective rather than broad-based, he said in an interview to Moneycontrol.

For long-term investors, he believes such phases tend to reward discipline—provided the focus remains on earnings visibility and balance sheet strength rather than attempting to time short-term market moves.

According to Pradeep Gupta, the principal challenges in FY27 are likely to be externally driven including continued geopolitical uncertainty and its impact on risk sentiment, crude oil price volatility, and uneven global growth.

Does the Iran–US commentary give you confidence that the war will end sooner rather than later?

Recent communication from both the US and Iran does suggest a degree of restraint, with an evident awareness of the economic and geopolitical costs of a prolonged escalation. Financial markets, particularly oil and currency markets, appear to be interpreting this as a signal that risks of further escalation may be contained.

That said, geopolitical episodes of this nature tend to remain fluid, and outcomes can shift quickly. While the tone is incrementally constructive, it would be premature to assume a swift resolution.

At this stage, one can perhaps say that the probability of an extended disruption has moderated at the margin, but uncertainty remains elevated. Policy signalling from the US remains somewhat difficult to anticipate, while in Iran, the complexity of institutional decision-making adds another layer of opacity. Both factors contribute to uncertainty around the duration and intensity of the conflict.

What are the key lessons from the US–Iran war?

From Indian equity market perspective, the most immediate lesson has been the persistence of volatility, even in markets with relatively strong domestic fundamentals. Despite India delivering real GDP growth in the range of 7–8 percent in recent quarters, maintaining a contained current account deficit (largely within 1–1.5 percent of GDP), and seeing steady corporate balance sheet improvement, equity markets have reacted sharply to global cues.

This reflects the growing integration of Indian markets with global capital flows. Short-term movements are increasingly driven by external risk sentiment rather than domestic fundamentals alone. Structurally higher return ratios and earnings growth have allowed Indian equities to command a premium valuation multiple over most peers. Yet, in periods of uncertainty, despite continued relatively robust earnings expectations, India’s valuation premium has come under pressure.

At the same time, the episode reinforces that the underlying drivers of the Indian economy—domestic demand, public capex, and a gradual private investment cycle—remain intact. Crude oil remains the key transmission channel; while prices have been volatile, global supply dynamics (including US production and OPEC+ actions) continue to suggest that sustained spikes may be difficult to maintain unless disruptions are prolonged.

Have you seen significant investment opportunities following the Iran war-led sell-off?

Periods of geopolitical stress typically lead to a degree of indiscriminate risk-off behaviour, and this episode has been no different. In select pockets, valuations have corrected without a commensurate change in underlying earnings outlook.

We see emerging opportunities particularly in sectors linked to domestic consumption, financials, and segments of industrials where order books and balance sheets remain robust. However, at least under the current situation, the opportunity set is selective rather than broad-based. For long-term investors, such phases tend to reward discipline—provided the focus remains on earnings visibility and balance sheet strength rather than attempting to time short-term market moves.

Are you more concerned about Q1FY27 earnings than Q4FY26 numbers, given that the impact is likely to be visible in the first quarter?

There is a reasonable case to expect some near-term impact in Q1FY27, especially for sectors sensitive to energy costs—such as paints, aviation, and certain chemicals—as well as globally linked sectors where demand visibility remains uneven.

However, the extent of impact will depend significantly on the duration of elevated commodity prices. If crude stabilises—as has historically been the case after initial spikes—the effect on margins could be contained.

RBI data on non-government, non-financial listed companies suggest that electricity and fuel costs account for roughly 15 percent of operating expenditure and about 25 percent of net profit. Within this, petroleum products constitute less than one-fifth. Even under a scenario of a 50 percent increase in oil and gas prices sustained over a year, the impact on aggregate earnings growth is likely to be limited—of the order of 2–3 percentage points.

At this stage, therefore, the larger risk appears to be from supply disruptions and risk-aversion-driven valuation compression rather than a sharp downgrade to earnings.

The broader earnings trajectory appears supported by domestic drivers. Consensus estimates still build in mid-teens earnings growth over the next 1–2 years, underpinned by financial sector strength, government-led capex, and gradual recovery in private investment. Markets, in past episodes, have typically looked through such short-lived disruptions.

Do you see the RBI pausing rate cuts for the entire FY27? Will the central bank make significant change in its estimates for inflation and growth?

The Reserve Bank of India has, over the past few years, established considerable credibility in balancing inflation control with growth considerations. Headline CPI inflation has broadly trended within the 4–6 percent band, with recent prints closer to the lower end, aided by easing food and core inflation.

Given the current environment, the RBI is likely to remain data-dependent rather than pre-committed to a particular rate trajectory. A sharp shift in policy stance appears unlikely unless there is a sustained deviation in inflation—either due to commodity prices or domestic supply shocks.

Similarly, while there could be marginal adjustments to growth and inflation forecasts, especially if global conditions remain uncertain, a significant revision to the medium-term outlook does not appear warranted at this stage.

Do you expect a sharp and sustained market rally after a definitive resolution to the US–Iran conflict, or will the recovery be gradual?

Market behaviour in such episodes tends to follow a familiar pattern—an initial relief rally as risk premia compress, followed by a more differentiated, fundamentals-driven phase. India’s relative positioning—supported by growth visibility, macro stability, strong domestic flows and earnings trajectory—does make it structurally attractive. However, valuations in certain segments remain above long-term averages, which could temper the pace of any sustained rally.

Therefore, while a sharp near-term rebound is possible upon clear de-escalation, a more gradual and earnings-led progression is a more plausible base case. The durability of the recovery will ultimately depend less on the event itself and more on the continuity of earnings growth and liquidity conditions.

What are the key challenges for the market in FY27?

The principal challenges are likely to be externally driven. These include:
* Continued geopolitical uncertainty and its impact on risk sentiment
* Commodity price volatility, particularly crude oil, which has implications for inflation and the current account
* Uneven global growth, especially in key export markets.

What could be the potential impact on markets, economy and earnings globally if the West Asia war continues through April, May or June, particularly amid rising fears of an Iran ground invasion? Could you explain the depth of the impact on a month-wise basis?

The scale of the impact will depend critically on whether the conflict disrupts energy flows, particularly through the Strait of Hormuz, which accounts for roughly one-fifth of global oil supply. Markets are typically quick to price in such risks, but the transmission to the real economy tends to be more gradual.

April: The immediate phase is dominated by uncertainty and market reaction rather than full economic transmission. Oil prices tend to spike on supply concerns, leading to heightened inflation expectations. Financial markets typically turn risk-averse—equities correct, volatility rises, and safe-haven assets strengthen. At this stage, the impact is largely financial, with sharp moves driven by sentiment and positioning rather than changes in underlying economic activity.

May: If the conflict persists, the effects begin to move into the real economy. Elevated energy and freight costs start affecting corporate margins, particularly in energy-intensive sectors such as aviation, chemicals, logistics and manufacturing. There may also be early signs of pressure on consumption and business sentiment. This is typically when earnings expectations begin to adjust, although the extent depends on how sustained the commodity price pressures are.

June: By the third month, outcomes tend to diverge more clearly. In a base case, markets stabilise as supply chains adapt, policy responses take shape, and the risk of worst-case disruption is reassessed. However, in a more adverse scenario—particularly if there is a sustained disruption to energy supplies—the risks shift towards a stagflationary environment, with slower growth and persistently higher inflation.

The progression tends to move from a market-led shock in the first month, to earnings and cost pressures in the second, and then to either stabilisation or broader macroeconomic impact by the third. At this stage, the base case remains one of cyclical disruptions rather than structural dislocation, but the margin of uncertainty is meaningfully higher than usual.

On the domestic side, the key risk would be any delay in earnings normalisation in sectors where expectations have run ahead of delivery, as well as pockets of elevated valuations. That said, India enters this phase from a position of relative strength—characterised by steady growth, contained macro imbalances, improving banking system health, and policy continuity. These factors should provide a degree of resilience, even as markets navigate uncertain global backdrop.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.

Daily Voice: Anand Rathi’s Pradeep Gupta spots opportunities in consumption, financials and industrials; urges selective bets

9 out of 11 years BSE SMALLCAP SELECT has given positive returns in April.

Type	R1	R2	R3	PP	S1	S2	S3
Classic	7,191.79	7,274.02	7,421.86	7,043.95	6,961.72	6,813.88	6,731.65
Fibonacci	7,131.84	7,186.13	7,274.02	7,043.95	6,956.06	6,901.77	6,813.88
Camarilla	7,130.65	7,151.74	7,172.83	7,043.95	7,088.47	7,067.38	7,046.29

INDEX CONTRIBUTION - BSE SMALLCAP SELECT

Net Contribution

MC TechnicalsPRO

Pivot levels

Seasonality analysis

News

Moving Averages
Technical Indicators
Moving Averages Crossovers