Weekly market outlook from Vinod Nair, Head of Research at Geojit Investments
Mumbai: Indian equity markets ended a turbulent week on a positive note, overcoming early caution triggered by developments in West Asia, according to Vinod Nair, Head of Research at Geojit Investments Limited.
Nair noted that easing crude oil prices, a strengthening rupee, and softer 10-year bond yields helped allay fears of stagflation, enabling markets to recover from volatility and close higher. The improvement in macroeconomic indicators shifted investor sentiment from cautious to constructive as the week progressed, allowing equities to absorb bouts of profit booking sparked by fresh geopolitical headlines toward the end of the week.
Investor confidence was further buoyed by favourable state election outcomes and better-than-expected Q4 corporate earnings. Broader markets outperformed benchmarks, with midcap and smallcap indices leading the gains. Sectoral buying was visible in automobiles, defence, real estate, and pharmaceuticals.
Looking ahead, Nair said markets will closely track upcoming inflation data from India and the United States, along with domestic credit growth trends. These factors will play a key role in shaping expectations around RBI’s interest rate trajectory and corporate margin outlook.
While stable crude prices and the rupee’s recovery offer near-term support, Nair cautioned that any renewed escalation in West Asia could pose risks, particularly for commodity-sensitive sectors.
He added that selective opportunities remain in the midcap and smallcap space, where valuations are still reasonable relative to earnings visibility and domestic growth drivers such as infrastructure spending and a recovery in consumption. Until geopolitical clarity improves, a stock-specific strategy focused on earnings quality is likely to remain the preferred investment approach.
