"We are poised to turn a little bit more tactically constructive," said Abu Dhabi-based Powell in an interview over a video call. "The valuation is more interesting, but we want to see a bit more evidence," he said. BlackRock Investment Institute has allocated a higher share to Indian equities than their weight in global benchmarks. However, the firm remains more neutral in the near term as geopolitical risks, elevated energy prices and global yields could cloud the outlook.
In India, he sees opportunities in energy, defence and manufacturing as countries respond to geopolitical uncertainty. India's benchmark indices have underperformed most large peers in 2026. The Sensex is down 14.16%, while the Nifty is down 13.5%.
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When asked when foreign investors could return to India, Powell said they were looking for greater stability and upward momentum in corporate earnings before increasing their exposure to Indian equities. "We just need to see a little bit more comfort on the earnings directly before we can see those flows over time," he said.
Foreign investors have remained net sellers since July 2025. In 2026, they have sold Indian equities worth ₹4.55 lakh crore. According to BlackRock Investment Institute, between 2016 and 2025, about $5 of every $100 in assets acquired by households went into shares, investment funds and debt securities. Powell projects this to rise to $20 between 2026 and 2035.
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Crude price impact
Higher crude oil prices have posed a challenge for India as a major energy importer, but the economy has shown resilience, according to Powell. He believes that the growth outlook has remained good, although elevated energy costs would gradually feed into inflation across sectors.Brent crude oil prices have surged over 9% in the past month, driven by escalating geopolitical tensions and supply disruption fears in the Middle East. The global benchmark is trading near $116.72 per barrel.
US Fed, Bond Yields & AI
Volatility in South Korean and Taiwanese markets has raised questions about whether the AI investment boom has peaked. Powell said demand, earnings and capital expenditure in the sector remained strong, with money continuing to flow into AI infrastructure.While the AI investment boom continues to attract funding, higher capital costs will widen the gap between companies that generate strong returns and those that struggle, according to Powell.
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