The Indian markets hit a low towards the end of March 2026 and since then have risen. Let us examine the factors which could lead to the markets hitting new highs in this year from a fundamental point of view.
1. Easing Crude Oil prices
Ever since the war ended, the crude prices have moderated to reasonable levels. This eases the pressure on the Indian economy for the time being. We are in a multi year commodity bull market but stable crude oil prices can help propel the markets higher.
2. India US Trade Agreement finalization
There are indications that the trade deal will be finalized and finally signed soon. That is a huge trigger for the markets. Long Term benefits remain to be seen but signing of the trade deal is a sentiment booster.
3. Unravelling of the AI Trade
This is the most significant trigger for me. Liquidity has chased Korea and Taiwan and these markets have boomed. FIIs have taken money out of Indian markets. The FII ownership of Indian stocks has fallen to multi year lows. There are now noises of FIIs returning to India and July has been positive so far. This would be a major trigger for the markets to rise.
Low crude oil prices, progress on the Indo US trade deal front, FIIs returning and decent monsoons are the key triggers for a short rally in the markets towards new highs.
Another point to note that the Nifty may be 10 pc down from all time highs but the mid cap and small cap indices are almost at ATH.
