“Higher fuel costs, production and debt costs will reduce corporate profits, leading to a decline in valuations,” warned Siddharth Vora, Fund Manager at PL Asset Management. This statement encapsulates the current sentiment in the Indian stock market as it grapples with significant challenges.
As of April 10, 2026, the Indian stock markets are expected to start trading with some volatility, primarily influenced by the continuous withdrawal of funds by Foreign Institutional Investors (FIIs). On April 2, FIIs sold approximately ₹9,229.52 crore worth of stocks, a move that has raised alarm among domestic investors. In contrast, Domestic Institutional Investors (DIIs) stepped in to buy stocks worth ₹6,709.74 crore on the same day, indicating a mixed response to the market’s current state.
The backdrop of this market turbulence is further complicated by a weak Indian rupee, which is trading at ₹92.7870 against the US dollar, and rising Brent crude oil prices, currently around $96.59 per barrel. These factors have prompted PL Asset Management to express concerns about the macroeconomic challenges facing India, particularly as higher fuel costs are expected to squeeze corporate profits.
Despite these challenges, there are signs of resilience within certain segments of the market. Small Cap indices have shown a resurgence, with 60% of companies trading above their 10-day moving average. This could suggest that some investors are finding value in smaller firms, even as larger indices face pressure. Additionally, the Nifty index is trading at approximately 17.5 times forward earnings, which is below its long-term average, hinting at potential opportunities for investors willing to navigate the current volatility.
Looking ahead, the market’s direction will likely hinge on geopolitical developments, crude oil price movements, and FII flows. Emkay Global Research noted that “if a ceasefire occurs between the US and Iran, there could be a significant rally in Indian stocks.” This highlights the interconnectedness of global events and their impact on local markets, emphasizing the need for investors to stay informed.
Moreover, the Nifty’s Earnings Per Share (EPS) is expected to grow by 13-15% in the fiscal years 2025-27, providing a glimmer of hope for long-term investors. However, the immediate outlook remains uncertain, particularly with Wipro’s Q4 FY26 results anticipated to be weak, reflecting reduced profit opportunities in the tech sector.
In this environment, the current uncertain landscape requires investors to focus on companies with strong fundamentals and clear earnings potential. As the market navigates these turbulent waters, the impact of continuous FII selling on domestic buying remains unclear, and the future trajectory of crude oil prices and their effect on inflation and GDP growth is uncertain. Details remain unconfirmed.
