BlackRock stays cautious on Indian equities despite cheaper valuations
BlackRock Investment Institute has not yet adopted a bullish stance on Indian equities due to ongoing uncertainties. The firm anticipates greater clarity on corporate earnings and energy prices before changing its outlook. Despite elevated energy costs, India's economic resilience remains noteworthy amidst geopolitical tensions. Foreign investors have been net sellers of Indian equities for…
Mumbai: BlackRock Investment Institute has refrained from becoming bullish on Indian equities in the near term, despite more attractive valuations, according to Ben Powell, the firm's chief investment strategist for the Middle East and APAC. Before becoming more positive on Indian equities, BlackRock is awaiting clearer signals on corporate earnings, crude oil prices, global bond yields, and foreign fund flows.
Powell stated that while the valuation is intriguing, they need more evidence before shifting their stance. Currently, BlackRock has allocated a larger portion of its Indian equity exposure compared to global benchmarks, but they remain neutral in the short term due to geopolitical risks, high energy prices, and global yields. In India, BlackRock sees potential in energy, defense, and manufacturing sectors as nations respond to geopolitical uncertainties.
The Sensex and Nifty have underperformed compared to other major indices in 2026, with the Sensex down 14.16% and the Nifty down 13.5%. Foreign investors have been net sellers since July 2025, selling Indian equities worth ₹4.55 lakh crore in 2026 alone. BlackRock projects that the proportion of household assets invested in shares, funds, and debt securities will rise from $5 per $100 in 2026 to $20 per $100 by 2035.
Higher crude oil prices, while challenging for India as an energy importer, have not dampened the country's growth outlook, though the added costs may contribute to inflation across various sectors.
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