Indian markets offer strong 'alpha' opportunities in FY27 despite Middle East risks: Report

MUMBAI: India’s equity markets are likely to offer strong alpha opportunities in FY27 despite the ongoing West Asia conflict, supported by sectoral divergence, resilient macro buffers and potential recovery in foreign flows, a new report said on Wednesday.

According to Motilal Oswal AMC, the escalation in the West Asia conflict has introduced uncertainty around oil prices, inflation, currency movement and FY27 earnings estimates, and also created a fertile ground for stock-specific opportunities.

“We think the construct offers a great chance for alpha,” said Prateek Agrawal, MD and CEO, Motilal Oswal AMC, adding that volatility and dispersion across sectors could enable active investors to outperform.

Despite being among the more impacted large economies due to its energy dependence, India remains relatively better placed than many peers owing to its diversified fuel sourcing, strong foreign exchange reserves and lower dependence on oil for power generation.