National: HDFC Tru, the investment advisory arm of HDFC Securities, has released the June 2026 edition of its monthly market outlook report, Tru Insights, highlighting resilience in the Indian economy despite elevated geopolitical risks and global inflationary pressures. The report expects Indian equities to regain momentum in the second half of FY27 and believes the Nifty could scale fresh all-time highs as global uncertainties gradually recede.

Equity Market Outlook

After a strong rally in April, Indian equities witnessed a temporary pause in May, with the Nifty 50 declining 1.9%. However, broader markets continued to outperform, with the Nifty Midcap 100 and Nifty Smallcap 100 gaining 3.2% and 0.7%, respectively.

The report notes that foreign institutional investors remained net sellers to the tune of approximately ₹55,900 crore during May 2026. However, robust domestic institutional participation, with net purchases of around ₹82,600 crore, more than offset foreign selling pressure.

According to the report, large-cap valuations have become increasingly attractive, with the Nifty currently trading at nearly a 10% discount to its long-term average valuation levels. Coupled with expectations of stronger earnings growth in the second half of FY27, the current environment presents a favourable opportunity for long-term investors.

India’s Macro Fundamentals Remain Strong

The report highlights that India’s economic fundamentals continue to remain resilient despite external headwinds.

Consumer inflation remained relatively contained at 3.48% in April 2026, while manufacturing and services activity continued to expand. India’s manufacturing PMI rose to a three-month high of 55.0 in May, while the services PMI improved to 58.9, reflecting strong domestic demand and business activity.

The report also points to record merchandise exports and continued strength in domestic consumption, reinforcing confidence in India’s medium- to long-term growth trajectory.

Geopolitical Risks Continue to Drive Volatility

Global markets remained influenced by ongoing geopolitical tensions in the Middle East, elevated energy prices and persistent inflationary pressures.

The report notes that crude oil prices remain a critical variable for emerging markets, including India, due to their impact on inflation, current account balances and monetary policy expectations. While volatility may persist in the near term, HDFC Tru believes markets are likely to stabilise as clarity emerges around global geopolitical developments and trade negotiations.

Fixed Income Outlook

On the debt market front, the report observes that India’s 10-year government bond yield remained largely stable at around 7.0% during May 2026 despite global volatility.

The Reserve Bank of India maintained the repo rate at 5.25% and retained its neutral policy stance. While inflation remains under control, the report expects policymakers to remain watchful of energy prices, currency movements and weather-related risks before taking any future policy actions.

The report continues to prefer accrual-oriented fixed income opportunities, particularly within high-quality corporate bond segments.

Deep Dive: Copper May Lead the Next Commodity Supercycle

A key feature of the June edition is a detailed study on copper and its growing strategic importance in the global economy.

According to the report, copper is emerging as a strong candidate to lead the next phase of the commodity supercycle, supported by structural demand drivers such as global electrification, renewable energy investments, artificial intelligence infrastructure, data centres and electric vehicles.

The report highlights that copper continues to trade at historically low valuation ratios relative to gold and silver, despite rising demand and long-term supply constraints. Declining copper discoveries, lower mining investments and slowing production growth from key producing regions could further tighten supply over the coming years.

Investment Perspective

HDFC Tru believes that while geopolitical developments may continue to create intermittent market volatility, India’s strong domestic growth drivers, improving earnings outlook and reasonable valuations provide a constructive backdrop for investors.

The report maintains a positive outlook on Financials, Industrials, Power, Real Estate, Auto and Oil Marketing Companies, while remaining selective in sectors where valuations continue to be demanding.