The Indian stock market has gone under a prolonged consolidation phase since the bull run lost steam in September 2024. However, Motilal Oswal Financial Services (MOFSL) now believes that cooler valuations, improving earnings, strong domestic liquidity and resilient economic fundamentals have strengthened the risk-reward for Indian equities.
In its latest India Strategy report, the domestic brokerage said the market has been range-bound below its peak levels, but there was significant divergence in sector and stock performance beneath the surface. Sharp sectoral rotation toward segments with a higher representation of mid and small-caps helped SMIDs outperform, cushioning the impact of a sharper drawdown in large-caps, which limited the broader weakness in Indian indices, it said.
