Benchmark Nifty has staged a sharp rebound so far in April, rising about 8% in just 15 trading days after a steep, nearly 10% correction in March. However, despite the recovery, the index continues to trade below its pre-war levels of sub-25,000. The sustained FII outflows underline concerns around India’s relative positioning amid global uncertainties, particularly as investors continue to favour markets linked to the AI-driven rally elsewhere.
Analysts point to crude oil prices as a key overhang. Vinod Nair, Head of Research at Geojit Investments, said elevated oil prices are emerging as a major macro concern. The earnings season has now kicked off, shifting investor focus to company-specific performance. Brokerages maintain their caution despite the recovery. BNP Paribas has cut its 2026 Nifty target by 11% to 25,500, citing weaker earnings growth and a moderation in valuation multiples.
Domestic institutional views, however, remain relatively constructive. HDFC AMC noted that the recent correction has improved valuation comfort in parts of the market, with six out of twelve sectors now trading below their long-term averages. Over the medium to long term, the outlook for Indian equities remains supported by strong domestic growth, healthy corporate profitability and policy support.
