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PL Wealth, in its latest Market Outlook – June 2026 report, highlighted that despite rising inflationary pressures, high oil prices and FII outflows from the market, India has been among the best performing large economies in the world owing to robust domestic demand, robust manufacturing and services activity, healthy credit growth and domestic liquidity.

According to report, the economic performance of India continues to be strong, with the manufacturing and service PMI figures of 55.0 and 59.8, respectively, in May 2026. This is far better than that of most other major economies around the world. The active participation of institutional and retail investors has been instrumental in stabilizing markets despite the high outflow of FIIs.

Report mentioned that even though the Indian economy is resilient, the increase in prices of crude oil, the ongoing political instability in West Asia, as well as other problems like the inflationary trend, will cause volatility in the market in the near future. It would be wise for the investor to choose selectively.

Commenting on the outlook, Inderbir Jolly, CEO, PL Wealth, said: “India continues to be an outlier among the leading economies of the world because of the robust nature of the domestic economic growth engines like consumption, production, infrastructure spending and the growing trend of savings being financialized. In spite of the presence of uncertain factors in the global scenario, high oil prices and the threat of inflation, India’s structural growth story is still intact. It would help investors to maintain discipline in their asset allocation and invest only in quality businesses that offer earnings visibility.”

Macro Environment

According to the report, India will start FY27 from a position of strength because of good economic activity in the different economic sectors. The manufacturing and service sector activities continue to be strong, while credit growth, GST collection, and capacity utilization show economic resilience.

The report pointed out that the risk of inflation had increased due to high crude oil prices and geopolitical tension. Even when the headline inflation is manageable, the rising energy price, currency depreciation, and supply side pressures might pose problems in the coming quarters. Thus, the Reserve Bank of India is expected to maintain a careful monetary policy stance.

The report noted that India has ample foreign exchange reserves and continued progress in trade agreements despite risks due to global growth worries and uncertainties in the energy market.

Market Valuation & Positioning

PL Wealth stated that market performance has grown more selective in nature where investors favour companies showing visible earnings, healthy balance sheet and good growth potential.

As per the report, short-term earnings revisions are still under pressure in various sectors because of increasing cost of production and a difficult global backdrop. Even though there has been improvement in terms of broad market participation, yet leadership is still selective in certain sectors and quality names.

The report stressed that the prevailing market conditions favor selective stock picking than broad market participation.

Equity Markets – An Overview and Approach

PL Wealth has a positive long-term view of the Indian equity market based on the favorable demographic composition, infrastructure, manufacturing, deepening of the economy and increased participation of local investors in financial assets.

Short Term Outlook (0 to 6 months)

The markets are expected to be range-bound and event-based based on crude oil prices, inflation trends, monsoon trends, geopolitical happenings and changes in earnings expectations. During the short term, investors will be able to invest in quality large-cap stocks and large & mid-cap strategies on a staggered basis.

Medium Term Outlook (6 to 24 months)

As the inflation pressures ease off and the external headwinds decline, the domestic growth drivers will help in broad-based earnings recovery. Investors can then slowly allocate more to large cap, large & mid-cap and sectoral strategies.

Long Term Outlook (24 to 60 months)

The long-term growth prospects for India are well intact based on the favorable demographics, increased consumption, infrastructure spends, diversification of supply chains and increasing financial investments. Long-term wealth creation is expected through disciplined investing, asset allocation and business ownership.

Fixed Income Outlook

The report stated that the fixed income investing environment had become tougher with higher inflation expectations and high-interest rate environment.

Though the RBI has maintained the monetary stance, the inflation expectations have gone up, making the outlook on duration a bit more conservative. PL Wealth believes that the investors must concentrate on short-duration and medium-term fixed income investment avenues that provide decent risk-reward.

It is also mentioned in the report that the liquidity scenario is positive because of RBI interventions, but inflation, currency, and international news

Outlook for Commodities

According to the report, gold is gaining importance as a strategic reserve metal against the backdrop of rising geopolitical uncertainties and ongoing concerns about inflation. Central banks' purchases and efforts of sovereign investors for diversification are likely to underpin the prices of gold on a structural basis going forward.

However, over the short term, rising real interest rates and appreciation of the US dollar may cap any upside move in the prices of gold. Silver, on the other hand, is expected to exhibit volatility.

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