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Informist, Thursday, Jun. 25, 2026

MUMBAI – Challenges arising from the war in West Asia, US tariffs, lofty valuations, low growth in nominal GDP and corporate earnings, depreciation of the rupee against major currencies, and outflows in foreign portfolio investments are showing signs of abating, ICICI Securities Ltd. said in a report Thursday. The valuations of companies part of the benchmark Nifty 50 have reduced from highs, the outlook for nominal profit growth seems healthy, and the capital expenditure cycle seems to be improving even as inflation looks like it is beginning to rear its head again, ICICI Securities said. The Indian rupee is above 95 a dollar and selling of Indian equities by the FPIs has also reduced.

The benchmark 50-stock index's 12-month forward price-to-earnings multiple slipped to around 18 from its peak of over 24 in late 2024. This dip will likely allow stock prices to track earnings growth more accurately, the brokerage said. Since the beginning of 2026, the Nifty 50 has declined about 8%. 

The fall in crude oil prices is seen as a positive driver for equities going forward, the brokerage said. With the US and Iran signing a memorandum of understanding, Brent Crude Oil futures slumped as much as around 41% as of Thursday from the year's high of $122.53 per barrel. FPI outflows in the equities market have reduced in June from May. The Reserve Bank of India's slew of measures to attract foreign exchange into the country are also a key tailwind.

As for artificial intelligence, there seem to be fewer chances of a "market-wide meltdown" now, though exuberance related to this sector may temper down, according to the report. Global hyperscalers continue to be optimistic about growth and demand for the technology is unlikely to fade. The collapse of AI infrastructure would be chaotic and pose a significant risk to global equities, ICICI Securities penned.

However, a strong El Nino will continue to pose a risk to Indian equities going ahead. There is a possibility of crop output in agricultural gross value added being hit incrementally but only time can tell the severity of the impact of the El Nino. The advancement of the south-west monsoon and healthier all-India reservoir levels provide some solace, the brokerage said in the report.  End

Reported by Ruchira Kagita

Edited by Akul Nishant Akhoury

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