India’s NIFTY Gains 3% for the Week as Foreign Buying Returns; Strong 2Q Earnings Offset by Weak Monsoon Rainfall
India’s NIFTY index rose 3% week over week, while foreign investors turned net buyers.
India’s NIFTY index rose 3% week over week, while foreign investors turned net buyers. Among 89 MSCI India companies, 49% beat 2Q earnings expectations, with an average surprise of +3%. However, monsoon rainfall was 14% below normal, putting pressure on agriculture.
Goldman Sachs expects the NIFTY to reach 26,500 points in June 2027. The firm maintains positive rating or equal-weight recommendations on sectors including financials and energy. India remains underweighted in emerging-market allocations, while earnings-revision sentiment has turned slightly positive.
The note identifies stronger-than-expected earnings and renewed foreign inflows as support for valuations. It also warns that insufficient monsoon rainfall could pressure agriculture and increase inflation risks. The note says that a shift to positive earnings revisions could drive further capital inflows, although the improvement has not yet been fully priced in.
The note describes the potential trading implication as an positive rating position in the Indian market, with particular focus on the financial and energy sectors, while identifying monsoon data as a short-term risk variable. It views the NIFTY, financials and energy as beneficiaries, and agriculture-related sectors as vulnerable to insufficient monsoon rainfall.
Key catalysts are subsequent monsoon-rainfall data, the durability of foreign inflows into India, and the Reserve Bank of India’s stance on responding to inflation.
Goldman Sachs expects the NIFTY to reach 26,500 points in June 2027. The firm maintains positive rating or equal-weight recommendations on sectors including financials and energy. India remains underweighted in emerging-market allocations, while earnings-revision sentiment has turned slightly positive.
The note identifies stronger-than-expected earnings and renewed foreign inflows as support for valuations. It also warns that insufficient monsoon rainfall could pressure agriculture and increase inflation risks. The note says that a shift to positive earnings revisions could drive further capital inflows, although the improvement has not yet been fully priced in.
The note describes the potential trading implication as an positive rating position in the Indian market, with particular focus on the financial and energy sectors, while identifying monsoon data as a short-term risk variable. It views the NIFTY, financials and energy as beneficiaries, and agriculture-related sectors as vulnerable to insufficient monsoon rainfall.
Key catalysts are subsequent monsoon-rainfall data, the durability of foreign inflows into India, and the Reserve Bank of India’s stance on responding to inflation.