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Oil Volatility, FPI Flows & Emerging Domestic Themes: Positioning for Alpha -May 2026

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Summary

On 01-May-2026, Prateek Agrawal, Motilal Oswal Asset Management highlights oil-driven macro pressure, FPI outflows, and forex stress weighing on markets. Easing crude supports sentiment, while domestic themes-EVs, defense, renewables, and manufacturing- offer alpha opportunities amid modest earnings recovery.

Key Takeaways

  • Elevated oil prices strain forex and current account; easing crude improves near-term market sentiment.
  • Continued FPI selling and forex outflows remain key overhangs on equity markets.
  • Government response focuses on reducing oil dependence via electrification, renewables, and domestic manufacturing.
  • Emerging themes: EV adoption, defense indigenization, data centers, and import substitution gaining traction.
  • Earnings recovery was underway pre-war; oil shock remains the primary disruption to outlook.
  • Portfolio tilt toward high-growth sectors; underweight banks and IT due to lower growth visibility and high FPI ownership.

Fundyantra Insight

Macro stress is concentrated in oil-while micro-opportunities are shifting toward structural domestic themes, creating a clear divergence for alpha generation

Mutual fund investments are subject to market risks. Read all scheme-related documents carefully.

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  • Registered mutual fund distributor ARN:152411
  • Registered mutual fund distributor – Code No - 18016

Pictern Technologies LLP is AMFI Registered mutual fund distributor with registration no ARN – 152411 and a BSE registered mutual fund distributor (code – 18016) with registered office at Hyderabad, India

disclaimer

Mutual Fund investments are subject to market risks, read all scheme information and other related documents carefully before investing. The NAVs of the schemes may go up or down depending upon the factors and forces affecting the securities market including the fluctuations in the interest rates. The past performance of the mutual funds is not necessarily indicative of future performance of the schemes. The Mutual Fund is not guaranteeing or assuring any dividend under any of the schemes and the same is subject to the availability and adequacy of distributable surplus. Investors are requested to review the prospectus carefully and obtain expert professional advice with regard to your specific requirements, legal, tax and financial implications of the investment/participation in the scheme before investing.

  • Registered mutual fund distributor ARN:152411
  • Registered mutual fund distributor – Code No - 18016

Pictern Technologies LLP is AMFI Registered mutual fund distributor (registration no ARN – 152411) and a BSE registered mutual fund distributor (code – 18016) with registered office at Hyderabad, India

disclaimer

Mutual Fund investments are subject to market risks, read all scheme information and other related documents carefully before investing. The NAVs of the schemes may go up or down depending upon the factors and forces affecting the securities market including the fluctuations in the interest rates. The past performance of the mutual funds is not necessarily indicative of future performance of the schemes. The Mutual Fund is not guaranteeing or assuring any dividend under any of the schemes and the same is subject to the availability and adequacy of distributable surplus. Investors are requested to review the prospectus carefully and obtain expert professional advice with regard to your specific requirements, legal, tax and financial implications of the investment/participation in the scheme before investing.

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