Indian currency, Indian bonds, Indian equities are all cheap now: Manish Chokhani

The wounds from the recent bloodbath remain fresh on Dalal Street, even as markets attempt to recover some losses. Market expert Manish Chokhani pointed out that Indian currency, bonds and equities are all cheap now, and this could unleash a buying frenzy.

“Indian currency, Indian bonds, Indian equities are all cheap now. Just waiting for cheap oil to unleash a buying frenzy? Is it the dark hour before dawn…or the twilight before a dark night?” the Director at Enam Holdings said in a post on X.

Both Sensex and Nifty have crashed nearly 9% respectively so far in March, with the sharp selloff wiping out more than Rs 40 lakh crore from the total market capitalization of all companies listed on BSE. This came as the war between Iran and US-Israel triggered a massive rally in oil prices and rattled global markets. Market analysts also highlighted the possible impact of prolonged elevated oil prices on India’s economy.Earlier this month, Moody’s Ratings had said that India could face pressure on the rupee, higher inflation and a widening current account deficit in case the Middle East crisis continued to push up energy prices and disrupt supplies. Costly energy imports would weaken the rupee, raise inflation, worsen the current account balance and complicate monetary policy as well as fiscal management if they lead to expanded subsidies to help offset the economic shock.

“India is a resilient country with strong fundamentals. While we have war raging on, Indians understand the challenges and are willing to work with the government. There will be a shortfall in economic activity in the short run, but we will make up for it in the coming months,” said Union Commerce and Industry Minister Piyush Goyal during a fireside chat with CNBC-TV18 earlier this month.

Markets heal after bloodbath

While the war is officially in its fourth week, markets found some much-needed relief after the leaders of the countries involved in the conflict hinted at ceasefire talks and possibility of reopening the Strait of Hormuz, a critical waterway for oil supply.
The US President Donald Trump-led administration has sent a 15-point plan and ceasefire proposal to Iran to end the raging war in the Middle East, multiple news agencies reported. The peace plan was shared with Iranian officials on Tuesday via Pakistan, according to the New York Times.
Trump, meanwhile, claimed that Iran has agreed that it will “never have a nuclear weapon”, even as fighting in the region continued and Tehran publicly denied that any formal negotiations are underway. Trump also claimed victory in the war, stating that US military forces have destroyed Iran’s military capabilities. “Look, their navy’s gone, their air force is gone, their communications are gone. Pretty much everything they have is gone,” he said. Later, the US President added that Iran had sent what he described as a “very big present” linked to the Strait of Hormuz, calling it a sign that the US was “dealing with the right people”.

As a result of the rising expectations of the war ending soon, oil prices sharply slipped below the key $100 per barrel mark today. Brent crude futures declined nearly 5% to $99 per barrel on Wednesday morning.

Indian stock markets rallied sharply on Wednesday, with Sensex jumping 1,150 points to 75,214, while Nifty 50 gained 370 points to near 23,300 in the morning. The benchmark indices have extended gains for the second consecutive session, erasing all losses recorded during Monday’s crash.

The latest decline in oil prices have stoked hopes for the selloff in markets to calm down. Only time will tell whether the recent bloodbath was the “dark hour before dawn” or “the twilight before a dark night”, as stated by Chokhani.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)