BlackRock stays cautious on Indian equities despite cheaper valuations

BlackRock Investment Institute has not yet adopted a bullish stance on Indian equities in the near term despite valuations becoming more attractive, said Ben Powell, the firm's chief investment strategist for the Middle East and APAC. The firm is awaiting greater clarity on corporate earnings, crude oil prices, global bond yields and foreign fund flows before turning more positive. Powell said BlackRock remains structurally overweight on India as household savings increasingly move into financial assets, creating a domestic pool of capital that can support economic expansion at a time when governments and companies across the world are competing for funding.

Foreign investors have remained net sellers since July 2025, selling Indian equities worth ₹4.55 lakh crore in 2026. Powell projects the share of household assets going into shares, investment funds and debt securities to rise from $5 per $100 between 2016 and 2025 to $20 per $100 between 2026 and 2035. On geopolitical risks, he said markets are closely watching whether the US midterm elections in roughly 10 days could influence AI-related regulation, particularly around data centre expansion. Higher crude oil prices have posed a challenge for India as a major energy importer, but the economy has shown resilience, according to Powell.