Indian equities are positioning for a potential significant rebound from their 2026 lows, according to Morgan Stanley's Ridham Desai. As reported by CNBC TV18, the Nifty 50 has recovered nearly 2,000 points from its March lows of 22,182, including a 900-point surge on Wednesday. Desai highlighted that the trailing 12-month performance of the market is nearly the worst in history, with relative valuations now at previous troughs. The latest market data shows the Sensex rising 2,946 points to close at 77,563 and the Nifty rising 874 points to 23,997, with the market's ability to maintain and increase gains throughout the session being particularly noteworthy.
According to Desai's analysis reported by CNBC TV18, India's share in profits exceeded its index weight by the highest margin ever, indicating significant undervaluation. The Sensex is now nearly at the cheapest ever in gold terms, suggesting attractive entry levels for international investors. Positioning of Foreign Portfolio Investors (FPIs) has weakened in recent months, with new series beginning at significantly high short positions. The latest market data shows FII cash selling down to around ₹2,000 crore versus previous levels of ₹8,000-9,000 crore, while FII net short positions cut by 32,000 contracts to 2.27 lakh contracts.
As reported by CNBC TV18, Desai noted that the earnings upcycle appears to have resumed, with high-frequency data showing strength except for scattered conflict-related weakness in March. The Reserve Bank of India has turned currency sentiments positive, with the rupee remaining undervalued. The earnings season begins today with TCS reporting March quarter results, alongside broader market names including GM Breweries and Anand Rathi Wealth. Market commentary suggests that TCS management commentary will be key not just for the stock, but also for the other IT peers, with the bulls hopeful that the Nifty Bank continues its rebound.
The latest market data shows significant recovery momentum, with Nifty at 24,000 meaning the market has recovered around 70% of the war-led 12% fall. As per CNBC TV18, the Nifty support at 23,820, resistance at 24,300 (next swing high) indicates continued upward trajectory. The market is already pricing immense optimism, leaving room for negative surprises, while the bulls will be hopeful that the Nifty Bank continues its rebound with 55,000 now the key level on the downside after a 3,000-point rally on Wednesday. Other stocks to watch include Lupin, NHPC, NTPC, Poonawalla Fincorp, and ESCORTS, with the focus remaining on the start of the fourth quarter results season.
