The ongoing geopolitical tensions in West Asia have triggered volatility across global financial markets, forcing investors to reassess risk and reallocate capital. A businessline analysis of benchmark equity indices across major emerging markets and some developed economies for the period between February 27, 2026 and April 15, 2026 reveals Nifty-50 has emerged as one of the better-performing equity benchmarks, underpinned by demand from domestic investors.
In terms of valuation, however, Nifty 50 continues to trade at considerable premium to its emerging market peers.
Global markets under pressure
The West Asia conflict has had uneven effects across global equity markets. Several emerging market indices such as of the United Arab Emirates’ MSCI, which fell by 7.6 per cent, and South Africa’s JSE, which fell by 7.1 per cent for instance, indicate proximity to the zone of conflict or sensitivity to global trade cycles.
Other economies such as Indonesia, whose benchmark index fell by 7.4 per cent between end February and present, and the Philippines whose index fell by 8.3 per cent, seem to have been severely hit due to their excessive dependence on West Asia for their energy and other needs.
While India is also vulnerable to trade disruptions, demand from domestic investors, particularly through the mutual fund route, has helped stocks recover from the lows recorded towards the end of March. Nifty 50 could therefore recoup some of the losses and show relatively smaller loss of 3.7 per cent during the war. South Korea, similarly with its massive petroleum reserve stock, seems to have held onto some investor confidence, as its index fell by 2.4 per cent only.
Valuation comes at a premium
However, the Nifty 50 currently trades at significantly elevated valuation levels compared to its emerging market peers. With a price to earning (P/E) valuation of around 22.4, India stands far over-valued above peers such as China with P/E of 18 and Brazil with P/E of only 13.4, United Arab Emirates with P/E near 9.2, and the Philippines with P/E around 9.4.
This premium valuation raises questions about sustainability. High valuations imply that much of the expected growth is already priced in, leaving limited room for error. Any adverse macroeconomic shift, earnings disappointment, or global risk-off sentiment could trigger sharper corrections in such a richly valued market.
Roshan Flavian is an intern