Markets today are navigating a delicate balance between recovery and risk. While improving macroeconomic indicators, resilient corporate earnings, and more reasonable valuations are creating a constructive backdrop, rising geopolitical tensions are injecting uncertainty across asset classes.

In this environment, investors must look beyond the noise and focus on the signals that matter: staying agile, diversified, and disciplined in how they allocate capital.

Equities Domestic

Equity markets fundamentally are seeing improving macros and visible recovery in corporate earnings along with more palatable valuations; (Nifty 1Y Fwd PE at 16.9X) however, the current geo-political crisis acts as a strong headwind in the near-term. While our base case continues to anticipate a broadening of market participation, the evolving situation in the Middle East warrants a more cautious, agile and staggered approach to fresh allocations. Similar to domestic equities, global equities remain vulnerable at such times and fresh positions can be staggered between a well-diversified basket of DMs including US and EMs excluding India.

Alternates

Rapid advances in AI and defence technologies continue to drive investor interest across Unlisted Equities, including deep-tech PE and VC. However, recent IPOs listing below pre-IPO valuations have tempered appetite for late-stage private deals. The preference is shifting towards companies still two to three years from listing, where entry valuations and risk-return trade-off may be more reasonable Commercial Real Estate is the space where we continue to see steady growth across most cities (except Kolkata, Ahmedabad & Hyderabad which require deliberate monitoring)

Fixed Income & Commodities

Domestic Debt markets have seen some short-term volatility largely driven by global factors. Increasing inflationary risks, along with fiscal and BoP vulnerability amid elevated oil prices could keep the rate trajectory uncertain. In Commodities, both gold and silver though have strong fundamental drivers, have been volatile during the ongoing crisis. Allocation to precious metals warrant a more staggered approach to building new positions, with gold ~USD 4,200 and silver at or below USD 65 seen as good levels for accumulation.

Currency

INR has shown extreme vulnerability in the current geo-political crisis as DXY strength + FPI outflows + potential increase in CAD amid higher oil prices have weighed on the domestic currency. We believe, INR would remain under pressure till the time war continues and move in a broader band of 90-96, depending on Central Bank actions.

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This communication is for informational purposes only and does not constitute investment advice. Please refer to the full disclaimer in the Asset X report dated April 5th, 2026.