Indian equity markets are poised for a more constructive second half of 2026, driven by a favorable macroeconomic backdrop of declining crude oil prices and moderating inflation, according to market strategists.
After a volatile first six months characterized by profit-taking and weather-related anxiety, brokerages are increasingly optimistic that the pressure on corporate margins is easing.
The retreat in global energy prices is a critical tailwind for India, the world’s third-largest oil importer.
Lower input costs help contain the current account deficit and reduce the burden on domestic inflation, providing the Reserve Bank of India with greater flexibility in its monetary policy stance.
This dynamic is expected to support consumer spending and corporate profitability across sectors heavily exposed to fuel costs, such as logistics, aviation, and chemicals.
However, the outlook is not without significant headwinds.