IGI Logo

Below the Quote on Market Commentary for 08th April 2026 by Ajay Menon, MD & CEO - Motilal Oswal Financial Services Ltd

Global equity markets have staged a strong recovery following the announcement of a two-week ceasefire between the United States, Israel, and Iran. This triggered a sharp ~14% decline in Brent crude prices, bringing them below $95/bbl and significantly improving sentiment. Indian equities mirrored the global rally, with benchmark indices gaining ~3–4%—the Nifty surged over 850 points (+3.7%) and the Sensex rose more than 2,800 points (+3.8%).

Broader markets outperformed, with midcap and smallcap indices advancing over 4.2% each. Rate-sensitive sectors, including auto and financials, led the gains, rising around 6%.

The ceasefire has reduced near-term geopolitical uncertainty, supporting risk-on flows into equities—particularly in emerging markets like India, which had witnessed record FII outflows in March. Additionally, the sharp correction in crude prices is a key positive for India, as it eases inflationary pressures, narrows the current account deficit, supports the rupee, and strengthens fiscal dynamics.

On the policy front, the RBI maintained the repo rate at 5.25% with a neutral stance, ensuring stable liquidity conditions. While concerns around a potential inflation-led rate hike persist, the current pause continues to support valuations, especially in rate-sensitive sectors such as banks, financials, autos, capital goods, and infrastructure.

With macro stability in place, market focus is now shifting to Q4FY26 earnings. Stock and sector differentiation is likely to increase, with markets rewarding earnings visibility over liquidity-driven momentum.

The near-term outlook remains positive, supported by stable macros, improving sentiment, and liquidity conditions. However, the sustainability of the rally will depend on progress in geopolitical negotiations, easing of supply disruptions, and normalization of energy shipments. Movements in crude oil prices, the rupee, and FII flows will remain key determinants of near-term market direction.

Above views are of the author and not of the website kindly read disclaimer