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Daily Market Commentary for April 28th 2026 By Siddhartha Khemka - Motilal Oswal Financial Services Ltd

Indian market is expected to remain sensitive to developments in the West Asia conflict, with rising crude oil prices, weak rupee and FII outflows continuing to influence sentiment. As the ceasefire discussions remain fragile and the US-Iran negotiations are stalled over key issues such as sanctions, maritime restrictions and the Strait of Hormuz. At the same time, the ongoing earnings season will drive stock- and sector-specific action, with key results on Wednesday from Bajaj Finance, Adani Power, Vedanta, Indian Bank, Waaree Energies, Federal Bank and Granules India, which are expected to drive near-term market movements. On Tuesday, markets slipped into the red after the recent sharp rally, with the Nifty falling below the 24,000 mark and closing at 23,995 (-0.4%). The decline was driven by a combination of factors, including a sharp rise in crude oil prices (at USD111 per barrel, a one-month high), delay in the US–Iran peace negotiations, weak currency (94.5/USD), persistent FII outflows over the past six sessions and weak global cues. Profit booking after the recent recovery further weighed on sentiment, while banking stocks came under pressure following tighter RBI provisioning norms. Broader markets, however, remained relatively resilient, with the Midcap100 and Smallcap100 indices gaining 0.3% and 0.4%, respectively. Sectoral trends were mixed, with financials were among the key laggards, with PSU Banks and Private Banks declining on concerns around tighter regulatory norms.  The Reserve Bank of India has finalized the implementation of the Expected Credit Loss (ECL) framework from April 2027, replacing the incurred loss model with a forward-looking system that enables earlier recognition of credit risks and continuous monitoring. In the near term, this transition is likely to increase provisioning requirements and weigh on margins, particularly for PSU banks and lenders with higher exposure to unsecured and MSME segments. However, over the longer term, the framework is expected to enhance balance sheet transparency, strengthen financial stability and support more efficient capital allocation, with large private banks better positioned to navigate the transition. On the domestic front, the government is preparing a INR2.5 lakh crore credit guarantee scheme, with the finance ministry having cleared the proposal and a Cabinet note already submitted, marking the final stage before rollout. The scheme aims to support MSMEs, aviation and other sectors impacted by the West Asia crisis by ensuring easier access to credit and addressing liquidity stress, with implementation now contingent on Cabinet approval. Looking Ahead, markets are likely to cautious to the ongoing geopolitical developments, the movement in crude oil price and foreign fund outflows. In the near term, global cues will also be driven by the upcoming US Federal Reserve policy decision, which will be closely tracked for signals on interest rates and liquidity conditions.

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