Amid Trump and Iran giving conflicting statements on peace and the opening of Strait of Hormuz, bears are hoping that they will get a second chance to buy. As the ceasefire expires Tuesday, a fresh flare-up in Middle East hostilities could hand sidelined investors the re-entry they’ve been waiting for. But market signals, for now, are sending a different message entirely.
“Markets have clearly turned into buy-on-dips and no war information, whatever negative, is impacting the market,” said CA Rudramurthy BV, MD at Vachana Investments. “This is a very clear sign that the market texture has completely changed.” He sees Nifty heading toward 24,800-25,000, and is unequivocal in saying that this market cannot be shorted now.
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The rebound comes after Nifty50 ended a four-month losing streak in March 2026, a decline of that length that has occurred just seven times in the index’s entire monthly history. The recovery since has been fast, broad, and largely driven by retail and HNI buying. The pace of FII selling has also slowed down.
“A rally of sorts last week was mostly retail and HNI driven as they felt the market was oversold,” said market expert Sunil Subramaniam, noting that FIIs only began accumulating gradually toward the end of last week. DIIs, meanwhile, have been booking profits, building firepower ahead of the earnings season. “They will redeploy as you get clarity around the earning season,” he said.
Subramaniam says oil at $95 is painful, but not spiraling and suggests much of the bad news is already in the price. “This is a time when you can be reasonably confident that the market is close to a bottom unless there is a very dramatic military development,” he said, adding that the scenario most likely to break the market — US boots on the ground — remains a low-probability outcome, even if nothing is off the table with Trump.Manish Gunwani of Bandhan AMC goes further on valuations. “Valuations on a broad basis are quite attractive. We have been deploying cash across the board,” he said, pointing to private banks and other sectors where stocks have languished for three to five years despite earnings growth. “It is not about valuations,” he argued. The bigger structural challenge for India, in his view, is the global AI narrative — and whether India can compete for foreign capital against markets directly leveraged to that theme.
Near-term direction, analysts say, hinges on three variables: progress toward Middle East de-escalation, crude oil holding below $100, and the trajectory of foreign flows. Sustained cooling of the conflict could ease inflation and currency pressures, improving risk appetite for an import-sensitive economy like India’s. Q4 earnings and FY27 management guidance will then shape which sectors lead.
For now, Subramaniam’s advice to latecomers is pragmatic: “Keep buying, but small amounts. Stagger them. Do not go in today.” The setup, he says, favors patience.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)