Market Pressures Persist Amid Global Headwinds, Say Analysts
Indian share markets face pressure from rising crude prices, geopolitical tensions, and currency concerns, says Rajesh Palviya of Axis Direct. Despite recent economic reforms, global instability and continued FII outflows hinder quick recovery. Metals and mid-caps perform well, while IT faces AI disruption challenges. Gold import duties aim to protect forex reserves.
Amid persisting global headwinds, India's stock markets are anticipated to remain under strain over the next couple of quarters. Analysts point to rising crude oil prices, geopolitical tensions, and persistent foreign institutional investor (FII) outflows as primary factors contributing to this precarious situation.
Rajesh Palviya, Head of Research at Axis Direct, indicated that investor sentiment remains cautious, preventing markets from swiftly returning to their previous high trajectories. Market correction has stretched over 18 to 20 months, marking a prolonged adjustment phase since the COVID-19 pandemic.
Despite proactive reforms, foreign markets continue to influence domestic equities significantly. While certain sectors like metals and mid-caps show resilience due to strong earnings, the IT sector faces challenges from AI disruptions. The government's increase in gold import duty aims to safeguard foreign exchange reserves amid these uncertainties.
(With inputs from agencies.)
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