El Nino remains an important variable to watch; earnings recovery likely in H2FY27: Dharmesh Kakkad of ICICI Pru AMC

ICICI Prudential AMC's Dharmesh Kakkad cautions that markets may remain volatile in the near term amid continuous FII selling, El Nino risk to the monsoon, and uncertainty around US Federal Reserve policy moves. He flags margin pressure for Q1FY27 and Q2FY27 from input cost increases linked to the US-Iran conflict, with a broader earnings recovery likely only in H2FY27. Consumption stays a long-term structural theme supported by GST cuts and comfortable reservoir levels, while the Indian IT sector faces a de-rating phase due to weak global tech spending and AI-driven uncertainty around future business models.