Sensex Today | Stock Market Live Updates: Brent crude surges to $107; Nifty falls over 400 points

1 – Nomura Downgrades Indian Markets

– Downgrade India to “neutral” from “overweight”

– Nifty target at 24,900 from 29,300 earlier

2 – Primary Trigger Behind Downgrade

Primary trigger behind the downgrade is the possibility of elevated oil / energy / commodity prices due to ongoing conflict in West Asia.

3 – Two Other Emerging Triggers – PART I

– Impact of AI on India’s demographic dividend and structural story

– Too early to draw conclusions but can weigh on sentiment

4 – Two Other Emerging Triggers – PART II

– Domestic equity flows slowing down

– Subdued market returns could moderate domestic participation

5 – Pressure For Valuations

– MSCI India trades at 18.9x forward P/E (55% Premium to Asia Ex-Japan)

– FY27 earnings est. (15-18%) yet to reflect earnings risks

6 – Rationale Behind 24,900 Nifty Target

– Assumption of a 7.5% reduction in earnings estimates

– 10-15% risk to consensus earnings estimates if oil remains elevated

7 – The Struggle To Outperform

– India will struggle to outperform regional peers

– Recommend switch to Korea, MSCI China

– Korea attractive after recent fall

8 – What Happens To Oil

– India vulnerable to sustained high energy prices

– Could take 2-3 months for oil prices to normalize after war ends

9 – The Road Ahead

– Expect returns broadly in-line with overall MSCI Asia ex-Japan index

– Recommend bottom-up approach to stock selection

10 – Key Risks To Estimates

– Faster than expected resolution of geopolitical tensions

– Disappointment in the AI narrative / capex cycle

– An oversold Indian market