New Delhi, March 24 — Emkay Global Financial Services said on Tuesday that Indian markets are likely to see a smart recovery as the crude overhang eases and price‑earnings (P/E) premiums contract. The report projects the rupee to recover toward around Rs 91 per US dollar and the 10‑year government bond yield to fall to about 6.65% from the current 6.83%, with normalisation taking two to three months.
Emkay noted the Nifty fell 5% in the last three trading sessions, attributing the slide mainly to sustained foreign portfolio investor (FPI) selling. “We expect this trend to reverse, and India could emerge as one of the better investment opportunities in the region,” the report said.
The report modelled macro impacts under different oil price scenarios. An average Brent price of $80 per barrel in fiscal year 2026‑27 would reduce India’s GDP growth to 6.6%, lift inflation to about 4.3%, and widen the current account deficit (CAD) to roughly 1.7% of GDP.
A more severe terms‑of‑trade shock — with Brent above $100 per barrel — could push CAD/GDP beyond 2.5% and create a balance‑of‑payments gap of about $85 billion, the report warned. Emkay added that while oil and natural gas prices have edged higher, they remain below levels that would typically produce a shock of this size and duration.
According to the report, Brent at $85 per barrel would be largely manageable for the economy, but the macro impact becomes significantly more acute if prices cross $100 per barrel.
The firm’s simulation also indicates fiscal measures that would be needed to shield oil marketing companies (OMCs). “Our model simulation suggests that at current oil prices, the government will need to cut excise taxes by around Rs 19.5 per litre of average blended for diesel and petrol and absorb extra subsidy on LPG estimated at Rs 1 trillion to fully bear the OMC losses,” the report said — a step that would imply a fiscal cost approaching 1.1% of GDP.
— IANS
Original Source: https://assamtribune.com/business/market-recovery-predicted-rupee-to-rebound-to-91-against-us–1609771
Category: Business,More
Tags:
Publish Date: 2026-03-24 12:57:00
