In light of the recent state elections in India, where the Bharatiya Janata Party (BJP) won in West Bengal and the Dravida Munnetra Kazhagam (DMK) swept Tamil Nadu, Kotak Institutional Equities emphasizes that the Indian stock market will likely overlook these local political shifts. Instead, the focus will be on global geopolitical risks, particularly the ongoing conflict involving the US and Iran. The brokerage notes that despite the political changes, there is a relatively election-free corridor in India, allowing the central government to concentrate on addressing the country's weakening macroeconomic conditions. They express concerns about the fragile macroeconomic outlook, especially as negotiations between the US and Iran show little progress, which could lead to a short conflict with potential long-term implications on crude oil prices. Furthermore, the Q4 FY26 earnings season has been decent, aligning with expectations and resulting in only minor adjustments to future estimates. Kotak concludes that while valuations in the Indian market are generally fair, certain sectors have seen inflated valuations due to increased retail investor interest.