Market Outlook
| February 28, 2026 | 1 Month |
1 Year |
|
| Rupees per Dollar | 90.98 | 91.79 | 87.20 |
| Oil (dollars per barrel) | 72.48 | 68.40 | 74.04 |
| Retail inflation (CPI) | 2.75% (January) | 1.33% | 4.26% |
- The RBI Monetary Policy Committee kept the Repo rate unchanged at 5.25% while maintaining a neutral stance. The decision to hold policy rates steady was underpinned by an upwards revision of both GDP and CPI inflation forecasts for H1 FY2027
- RBI’s liquidity operations in the form of OMO purchases and USD/INR swaps conducted during December and January ensured adequately surplus liquidity in the banking system
- We expect RBI to maintain a long pause in policy rates as US tariffs have come down significantly from its peak and also on the back of expectations of an upward trajectory in CPI and GDP growth. The long term G-Sec yields may remain supported for this month due to lack of supply however, we expect the 10-year benchmark to remain slightly under pressure trading broadly in 6.65%-6.85% range as the ongoing geopolitical tension may keep crude prices elevated
| Index | 1 month (%) | 1 year (%) | 3 years (%) |
|---|---|---|---|
| NIFTY50 | -0.6 | 13.8 | 13.3 |
| BSE100 | -0.3 | 15.1 | 14.7 |
| NIFTY500 | 0.4 | 16.5 | 16.9 |
| NIFTY Midcap100 | 1.2 | 23.4 | 25.2 |
At February 28, 2026
Nifty was down 0.6 % for the month of February 2026
- Pressure on Nifty continued amidst heightened global geopolitical uncertainty and fears of AI-led disruption
- Within BSE 100 index, amongst sectors EPC / Pharma & Healthcare outperformed while Technology / Telecom underperformed the broader market
We continue to maintain our neutral stance on the market in the short term and positive stance in the medium term
- Overall earnings growth has improved though the trends remain divergent across sectors
- Rising geopolitical tensions and concerns on future of Indian IT services leading to markets nervousness
- Union budget focused on continuity with steady capex growth, restrained populism and fiscal consolidation
- The Nifty’s one year forward FY27E P/E at 20x, is largely in line with its 5-year average
In the medium term, we expect certain important drivers for growth:
- India’s growth outlook is supported by twin policy easing to support domestic demand
- Trade deals expected to help manufacturing capabilities over the medium term
Market consensus for Nifty earnings CAGR over FY2025-FY2027 at 8%; while FY2026-FY2028 at 15%
\ COMP/DOC/Mar/2026/43/2124
