After dream run, Indian markets likely to run into rough weather

Several worries on the horizon for equities, which just had their best month in two years

After posting its biggest monthly jump in two years, the Indian market is likely to face resistance if oil prices rise further and the rupee’s slide continues. Political uncertainty, possibility of disappointment in earnings of banks and a surge in stock valuations — following a seven per cent jump in the benchmark S&P BSE Sensex last month — could exert downward pressure on the equity markets.

“Macro headwinds are rising for Indian equities in the form of rising commodity prices, especially oil, depreciating rupee, fiscal challenges, election-related uncertainty and upside risks to inflation,” says Vinod Karki, vice-president (strategy), ICICI Securities.