Paresh Bhagat, CIO of Veer Growth Fund (AIF), and Chairman at Mangal Keshav Financial Services, believes that as long as crude oil prices remain elevated, the correction risk is not fully behind us.(Mangal Keshav Financial Services)AI Quick ReadExpert view: Paresh Bhagat, CIO of Veer Growth Fund (AIF), and Chairman at Mangal Keshav Financial Services, believes elevated crude oil prices are key risks for the Indian stock market.
"As long as oil remains elevated, the correction risk in India isn’t fully behind us," said Bhagat in an interview with Mint.
Beyond the geopolitical headlines, Bhagat said the more important things to track are crude prices, the direction of the rupee, and how FII flows are evolving. Edited excerpts:
It’s still a bit early to say that with conviction. The market has already recovered meaningfully from the panic phase, and valuations are no longer as attractive as they were about 10 days ago.
The bigger concern is that geopolitical signalling remains fluid — even the ceasefire is uncertain, and U.S. policy communication has been shifting quickly.
In this kind of environment, calling a clear final leg of correction may be premature.
Indian equities ended largely unchanged on 20 April, even as they touched their highest close since early March.
That shows strong domestic earnings are helping, but geopolitical risks and crude oil prices are still capping conviction.
From an investor’s perspective, this is not a market to chase aggressively after a bounce. If there’s a renewed decline, that could offer a better entry point.
The key variable isn’t just the conflict headlines, but whether they push crude higher in a sustained way.
As long as oil remains elevated, the correction risk in India isn’t fully behind us. Foreign investors also continue to pull money out, as oil risk, rupee volatility and earnings concerns remain in play.
For the rally to sustain, three things matter: first, the rupee needs to remain stable or strengthen, as a weaker rupee creates discomfort for foreign investors and raises macro concerns.
Second, FII flows need to improve. Domestic liquidity has absorbed selling well, but a healthier and more durable rally requires foreign money to stop treating India as an exit market.
Third, crude needs to cool off, or at least stop rising, since high oil directly affects inflation expectations, the current account, and overall sentiment.
There is also a strong domestic support layer. Solid quarterly numbers from large private banks have helped the market regain footing, while SIP flows continue to provide an important cushion.
Equity mutual fund inflows rose sharply in March, with SIP inflows hitting a record — a sign that domestic investors are still using corrections to deploy capital. That’s helping hold the market together even as foreign investors remain cautious.
The biggest non-geopolitical risk right now is still persistent FII selling. It’s something investors really need to keep a close eye on, because foreign institutional behaviour usually reflects both valuation comfort and overall macro confidence.
The fact that foreign investors sold a record nearly ₹1.8 lakh crore ($19.69 billion) worth of Indian assets in FY26 tells you this isn’t just a market reacting to headlines — there’s a deeper layer of caution around valuations, oil, and macro stability.
The second risk is the gap between valuations and earnings delivery. India’s fundamentals remain strong, but if earnings growth starts to slow while valuations stay elevated, the market can become vulnerable.
That mismatch tends to make corrections sharper when they do happen. The third is currency pressure. When the rupee weakens, and oil prices stay high, they tend to amplify each other - and that combination can quietly make the overall macro environment more fragile.
So, beyond the noise of geopolitical headlines, the more important things to track are crude prices, the direction of the rupee, and how FII flows are evolving.
India remains a long-term story, but with one clear condition: oil must not stay structurally high. If crude oil remains elevated for too long, it weakens India’s macro position by simultaneously impacting inflation, growth, the fiscal balance, and the current account.
However, if crude moves back toward the $60–70 range and stabilises there, India stands out again as one of the more compelling long-term growth stories among major emerging markets.
The current stress is driven less by structural domestic issues and more by the oil shock, foreign outflows, and resulting rupee pressure. The structural positives remain intact — domestic consumption, financialisation of savings, infrastructure buildout, and resilient domestic flows.
But markets don’t move on long-term narratives alone; they also need macro breathing room. So while the long-term India story is intact, near-term conviction improves significantly only when oil cools and stabilises.
The first lesson is to ignore the noise. Markets will always have events beyond your control — geopolitics, policy shifts, commodity spikes, currency swings.
Reacting emotionally to every headline usually hurts more than it helps. Second, do proper homework before investing.
If you understand the business, balance sheet, management, and valuation, short-term volatility becomes much easier to handle. Third, external factors come and go, but fundamentals eventually play out.
And finally, if you buy at reasonable valuations, you don’t need to fear temporary fluctuations. Valuation discipline gives investors staying power. In fragile markets, that matters even more, because permanent damage usually comes from overpaying or reacting impulsively.
Our newly launched Veer Growth Fund is designed to bridge the gap between private-market growth and public-market liquidity. We focus on late-stage pre-IPO, anchor, and select special-situation opportunities in high-quality companies at reasonable valuations before they list.
Our philosophy is built around GQP — growth, quality, and price. That means backing durable earnings and capital efficiency, insisting on clean accounting, strong working capital discipline, aligned promoters, and low leverage, while entering only within disciplined valuation bands that offer a clear margin of safety.
Even at this stage, we’re seeing meaningful maturity in our pipeline, with 2 to 3 portfolio companies expected to approach IPO readiness over the next 6 to 8 months. This gives investors a visible liquidity pathway rather than an open-ended private-market hold.
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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of the expert, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.