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Geopolitics, Oil Shock & Valuation Reset: Navigating Volatility with Selective Risk

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Summary

On 07-Apr-2026, Mr. Nilesh Shah (Managing Director, Kotak Mutual Fund) flags oil-led inflation risks, fragile global growth, and continued FII outflows. While macro headwinds persist, large-cap valuations have normalized, supporting selective allocation; commodities and domestic cyclicals offer tactical opportunities amid elevated volatility.

Key Takeaways

  • Oil price volatility remains the primary macro risk, with spillovers to inflation, currency, and fiscal stability.
  • Global growth concerns and high leverage constrain central bank flexibility on rate cuts.
  • Persistent FII outflows reflect relative valuation and global risk aversion; DII flows provide structural support.
  • Large-cap valuations have corrected to more reasonable levels; mid/small caps still not fully repriced.
  • Sectoral tilt towards domestic cyclicals (BFSI, auto, cement) over export-oriented segments.
  • Commodities act as a hedge in an inflationary and geopolitically uncertain environment.

Fundyantra Insight

Markets are transitioning from liquidity-driven excess to valuation discipline—allocation alpha will hinge on selectivity, not market direction.

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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