The snake-and-ladder game will play out again in the markets on Friday as well, with Gift Nifty indicating a healthy start. Positive global cues and confused signals from Iran-US corridors continue to keep marketmen disquiet.
Global cues support early optimism, but geopolitical uncertainty persists
Gift Nifty at 23,985 (6:30 am) signals a gap-up opening of about 125 points for Nifty.
While the immediate escalation risk has eased, the lack of clarity on sustainability is keeping investors in a defensive mode. At the same time, persistent FII outflows remain a key pressure point. Continuous institutional selling is capping upside momentum and indicating that global investors are still not fully convinced about near-term stability, said Ponmudi R, CEO of Enrich Money.
Global stocks are also up in early deals with Nikkei and Kospi surging nearly 2 per cent, tracking the overnight strong close at the US bourses.
Asian peers rally as US markets end strong overnight session
PL Asset Management, in its outlook, has warned that India’s macro picture could turn adverse as a confluence of risks — rising crude prices, a weaker rupee, slower global growth, disrupted logistics chains, and tighter global financial conditions — could together widen the fiscal deficit, slow GDP growth, and erode the macro tailwinds currently supporting market confidence. The firm notes that this scenario demands vigilance, not complacency.
Siddharth Vora, Head – Quant Investment Strategies & Fund Manager, PL Asset Management, said, “The global environment is transitioning into a high-uncertainty, liquidity-constrained regime, driven by geopolitical risks and persistent energy disruptions. Elevated crude prices are expected to keep inflation sticky and interest rates higher for longer, creating pressure on earnings, fiscal balances, and currency stability, with the rupee remaining vulnerable. “While valuations may appear reasonable on the surface, rising input, energy, and financing costs pose a meaningful risk to earnings, increasing the likelihood of valuation compression,” he said, adding that Market sentiment remains fragile, with flows and liquidity conditions playing a critical role in near-term direction. As a result, markets are likely to remain event-driven and volatile, reacting sharply to developments in geopolitics and energy prices. In this environment, disciplined risk management and selective positioning become essential, he added.
According to him, A preference for large caps, along with factors such as value, quality, and low volatility, is likely to be more resilient.
Meanwhile, Emkay Global Research said it sees the US-Iran ceasefire as a harbinger of a final peace settlement, bringing normalcy to energy prices within 1-2 months. “This is a catalyst for a breakout in Indian equities, with 13-15 per cent EPSg for the Nifty (FY25-FY27) and moderate valuations at ~19x PER (FY27E). Our Nifty target is now 29,000 for Mar-27E (vs 29,000 for Dec-26E earlier) and we add cyclical stocks to our model portfolio to play the market bounce,” it added.
US-Iran ceasefire seen as key catalyst for oil normalisation and equity breakout
Ponmudi added that, after the recent sharp rally, the market has entered a natural consolidation phase with visible profit-taking at higher levels. Global cues remain mixed, but supportive signals from overnight US markets and strength across Asian peers like Nikkei and Kospi indicate a mildly positive start. The market is now in a “wait and watch” phase — highly sensitive to news flow, with direction dependent on three key triggers: geopolitical developments, crude oil movement, and FII flow reversal.
Markets enter consolidation phase amid profit booking and mixed global cues