Indian equities need cheaper oil and calmer West Asia to recover, Nepean's Trivedi says

what happened

Gautam Trivedi, co-founder of Nepean Capital, told TradingView that Indian stocks are unlikely to recover in a lasting way before crude prices come down and geopolitical strain in West Asia eases. Foreign investors have kept selling Indian shares, and he sees cheaper oil and clearer signals from the conflict as the main factors that could bring overseas money back.

He still holds a positive long-term view of the country. Trivedi expects spending on power grids, data centres and factories to keep growing for years, and thinks certain small-cap firms run by founders who are scaling output stand to gain. He also sees bargains forming in some IT names following a long slump. Domestic institutions have soaked up large foreign outflows, though other investor groups remain under pressure.

He noted that oil's impact goes beyond the headline price, since freight charges for crude shipments have jumped too, now at $20 per barrel versus $3 a year earlier. Nepean has kept an overweight stance on small caps and recently bought TCS, which he sees as cheaply valued at about 13 times FY28 earnings.

why it matters

India is a major oil importer, so expensive crude pressures inflation, the rupee and appetite for Indian assets at the same time. If oil becomes cheaper and tensions in the Middle East ease, that could reduce foreign capital outflows, the scenario Trivedi points to. Investors will watch for a turn in foreign fund flows as the key signal.

market impact

Indian equities: cheaper oil and a calmer region could ease pressure from foreign selling

instruments