Emkay Global, in its latest strategy note, warned of significant downside risk for the Indian stock market until the Gulf conflict eases and the Strait of Hormuz (SoH) reopens. The brokerage said volatility around the SoH continued to keep Brent crude prices elevated at $105-110 per barrel, raising concerns over India’s macro-financial stability. Prolonged pressure on the current account deficit (CAD) and sustained foreign portfolio investor (FPI) selling are beginning to weigh on domestic markets, it said.

Petrol and diesel prices have been hiked by Rs 3 per litre, but Emkay expects further hikes, as under-recoveries persist at Rs 17-18 per litre. 

To recall, the brokerage had last week said continued energy crisis could push the Nifty to 21,000, 12.4 per cent below long-term average on price to earnings basis. For now, the brokerage expects normalcy to return in the coming weeks and see any market weakness as an entry opportunity, with shares in discretionary and industrials sectors as its key overweights.

India has faced a severe heat wave this summer, with average temperatures hovering 1.6-5°C above LTA and the IMD declaring heatwave conditions across large parts of north, central, and eastern India through to mid-May. 

"On 27-Apr-26, India accounted for all of the world’s 50 hottest cities, with average temperatures of 44-45°C. This is negative for agri, as the adverse heatwave is likely to impact crops and soil moisture while weakening reservoir buffers in the coming months. Beyond agri, the extreme heat wave will slow execution of infrastructure and could affect some categories of consumption due to hampered mobility," Emkay said.

Beyond the sticker-shock impact of weak kharif sowing, Emkay believes the impact on the agri economy would be muted. IT is not building in pessimistic scenarios for rural sectors or stocks for now. 

"Over the past 10 years, the impact of El Nino on the agri economy has been dwindling. Kharif sowing is still affected and typically turns negative, but food inflation spikes are limited to 6-7 per cent vs 14-15 per cent pre-2015. The spread between agri GVA and nominal GDP has also remained contained at -3-4 per cent vs 5 per cent in FY07. Strong buffers and active price management are key drivers of improved resilience," it said.

Among sectors that Emkay sees benefiting from weather disruptions include consumer durables and beverages, driven by stronger cooling demand and higher cold beverage consumption.  

"Power, utilities, and transmission are also expected to benefit from peak power demand and improved plant load factors (PLFs). Key stocks include Blue Star and Varun Beverages," it said.

"On the other hand, Infra, Cement, and QSR could face headwinds due to slower outdoor construction activity and weaker daytime footfalls. Key impacted names include Ambuja Cements and Devyani International," it said.