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OmniScience Capital: Post-US Midterms to Ease Tensions, Boost Indian Equities
M
Moneycontrol•02-10-2026, 07:42
OmniScience Capital: Post-US Midterms to Ease Tensions, Boost Indian Equities
- •Ashwini Shami of OmniScience Capital predicts geopolitical tensions will ease after the US midterm elections, leading to lower crude oil prices, reduced inflation, and softer US Treasury yields.
- •This shift is expected to improve corporate margins and increase fund flows into Indian equities, potentially leading to an upward repricing of the market based on FY28 earnings.
- •Shami anticipates a 25 bps RBI rate hike, considering it a monetary intervention for transitory inflation and rupee support, not the beginning of a rate-hiking cycle.
- •Q2 earnings may face pressure from elevated inflation and input costs, though services sectors, especially financial services, are expected to perform well due to strong credit growth.
- •Large-cap valuations are deemed attractive after recent corrections and FII selling, offering long-term growth potential despite current geopolitical and economic headwinds.
Key Questions Answered
Ashwini Shami expects the RBI to raise interest rates by 25 basis points at its next MPC meeting as a monetary intervention to manage transitory inflationary pressures and support the rupee.
Large caps have fallen to attractive valuation multiples due to near-term earnings uncertainty and FII selling pressure, with the Nifty 100 trading at a P/E of 19.1 and P/B of 2.87.
Public and Private Bank indices are attractively priced at P/Es of 7.1 and 16.5, respectively, and net interest margins are expected to stabilize as FCNR deposit inflows are deployed in coming quarters.
