Ben Powell of BlackRock expresses optimism about Indian equities, noting improved valuations and potential for renewed foreign investment amidst a recovering market.
New Delhi, India Jul 2, 2026 ALN: Ben Powell, chief investment strategist for APAC at BlackRock Investment Institute, has recently expressed a more optimistic outlook on Indian equities following a period of underperformance. In an interview, Powell discussed India's investment potential, the performance of IT stocks, and the implications of US bond yields. His insights come at a critical time for investors who are closely monitoring the dynamics of the Indian market, especially in light of recent global fluctuations.
Powell indicated that the worst of the foreign investor selling in India may be coming to an end. This statement is particularly significant given that foreign institutional investors (FIIs) have been major players in the Indian stock market, contributing to its volatility. He attributed the recent difficulties faced by Indian equities to external factors, including the AI boom and regional conflicts leading to energy shocks. The geopolitical landscape, particularly in regions like the Middle East and Eastern Europe, has had a knock-on effect on global energy prices, which in turn affects emerging like India.
However, he noted that energy prices have stabilized, which bodes well for India. Stability in energy prices is crucial for India, a country that heavily relies on energy imports. Powell suggested that this stabilization could lead to a resurgence of foreign investment, creating a positive feedback loop for the market. If foreign investors regain confidence, it could significantly boost liquidity and support stock prices, enhancing the overall market sentiment.
After two years of underperformance, Powell stated that India's premium has nearly vanished, making valuations more reasonable compared to other emerging . The term "premium" refers to the higher valuation multiples that Indian stocks historically commanded due to their growth potential. With this premium diminishing, investors may find more attractive entry points for Indian equities. Powell expressed confidence in the earnings forecasts for the next six to twelve months, which he finds encouraging for Indian equities. This outlook is critical as it suggests that despite past challenges, the fundamentals of Indian companies remain strong, and earnings growth could support stock prices moving forward.
When discussing India's position within the broader emerging market landscape, Powell mentioned that BlackRock is currently neutral on emerging market equities. This neutral stance does not indicate a bearish outlook; rather, it reflects a fully invested position. Powell emphasized a tactical shift towards Indian equities, suggesting a more favorable view in the coming months. This shift indicates that while BlackRock sees potential in Indian stocks, it is also mindful of the broader emerging market dynamics that could influence performance.
Emerging , in general, have faced headwinds due to various global factors, including inflationary pressures and tightening monetary policies in developed economies. India's relative stability and growth prospects could make it an attractive option for investors seeking exposure to emerging .
Powell addressed the recent sharp sell-off in Indian IT stocks, describing it as a situation of scarcity versus abundance. The Indian IT sector, which has been a cornerstone of the country's growth, has faced challenges as companies adjust to changing market conditions and global demand. While there is optimism surrounding AI's potential to create an abundant future, he cautioned that the market may have oversold certain stocks indiscriminately. The sell-off may have been exacerbated by profit-taking and broader market trends, leading to a disconnect between stock prices and underlying company fundamentals.
He highlighted the importance of a nuanced investment approach in this context. Investors need to differentiate between companies that are genuinely poised for growth and those that may be experiencing temporary setbacks. This requires thorough analysis and an understanding of each company's position within the rapidly evolving technological landscape.
With US bond yields rising to around 4.3% to 4.4%, Powell discussed the Federal Reserve's likely cautious stance. Higher bond yields can lead to increased borrowing costs and impact equity valuations, making it a critical factor for investors to consider. He believes the Fed will maintain a pause on policy changes as it navigates a complex landscape characterized by uncertainty in inflation, growth, and employment. The Fed's decisions are closely watched by global , as they can influence capital flows and investor sentiment.
Powell suggested that higher US bond yields could coexist with a robust AI investment narrative. This perspective is important because it indicates that investors may still find opportunities in equities, particularly in sectors poised to benefit from technological advancements, despite rising yields. The interplay between fixed income and equity will be a key theme in the coming months as investors assess the implications for their portfolios.
Looking ahead, Powell expressed confidence that the AI boom will continue, potentially driving strong earnings for companies involved in this sector. The rise of artificial intelligence has transformed various industries, and Indian companies are increasingly positioning themselves to capitalize on this trend. He believes that even with rising bond yields, the overall market can still thrive, supported by solid earnings growth. This optimism is predicated on the idea that technological innovation will spur activity and create new revenue streams for businesses.
The AI sector's growth could also attract foreign investment, further bolstering the Indian economy. As companies innovate and adopt AI technologies, they may improve operational efficiencies and enhance their competitive positioning, leading to higher profitability.
In conclusion, Ben Powell's insights reflect a cautiously optimistic view on Indian equities, emphasizing improved valuations and the potential for renewed foreign investment. As the market navigates external challenges, the focus on earnings and strategic positioning will be crucial for investors. The evolving landscape of global s, coupled with the transformative potential of technology, makes this an exciting time for Indian equities. Investors will need to remain vigilant and adaptable as they seek to capitalize on emerging opportunities while managing risks associated with volatility in global .
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