Market Consolidation Expected in FY27 Amid Global Stability Concerns, Says Mirae Asset's Somil Mehta
ETMarkets Smart Talk| FY26 a year of consolidation, not breakdown; global stability key for revival in FY27: Somil Mehta
The Economic Times
Image: The Economic Times
Somil Mehta, Head of Retail Research at Mirae Asset ShareKhan, predicts that FY27 will be a year of market consolidation following a challenging FY26. Key factors for recovery include global stability, easing geopolitical tensions, and continued domestic growth drivers in India.
- 01FY26 was marked by volatility and negative returns due to global geopolitical tensions and rising crude oil prices.
- 02A market revival in FY27 hinges on global stability and a return of foreign institutional investor (FII) inflows.
- 03Sectors like banking, defence, and infrastructure are expected to perform well due to strong domestic fundamentals.
- 04Gold and silver should be viewed as hedges against volatility rather than core investments.
- 05Indian markets are trading at a premium compared to peers, justified by strong economic growth.
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Somil Mehta, Head of Retail Research at Mirae Asset ShareKhan, reflects on FY26 as a year of market consolidation rather than breakdown, primarily due to global geopolitical tensions, rising crude oil prices, and foreign investor outflows. Despite these challenges, he notes that the Indian economy's underlying strength remains intact. Looking ahead to FY27, Mehta emphasizes that a revival in market sentiment will depend on global stability, particularly easing geopolitical risks and stable crude oil prices. He identifies key sectors for investment, including banking, defence, and infrastructure, which are expected to benefit from government spending and strong domestic demand. Additionally, he advises maintaining a small allocation in gold and silver as a hedge against market volatility. While Indian markets trade at a premium compared to other emerging markets, recent corrections have made large-cap stocks more attractive for long-term investors.
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The outlook for FY27 suggests that investors may see improved market conditions if global stability is achieved, potentially leading to better investment opportunities and returns.
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