New Delhi,  India's financial market will focus again on the evolution of the geopolitical shocks and policy responses after a strong political outcome for the BJP, according to Emkay Global Financial Services.

It holds that the strong political outcome for the BJP implies space for policy continuity ahead.

"The market focus will be back on the evolution of the geopolitical shocks and policy responses, with policymakers' focus to be squarely on minimising the economic cost of the same," said Madhavi Arora, Lead Economist, Emkay Global Financial Services.

With Brent crude oil prices likely to remain elevated in the near term, the economy could face a material terms of trade shock, which would have a triple whammy on growth, inflation and external sector.

Besides, it pointed out that with Brent possibly averaging $100 per barrel in FY23 could imply inflation above 5.6 per cent, CAD above 3 per cent, and growth below 7.5 per cent.

"However, our prelim assessment suggests aggregate Nifty profits to be fairly resilient in this downside scenario.

"Earnings resilience comes from the 'Big-4 sectors' that will either benefit (Oil & Gas, Metals) or will see the least or a negligible impact of higher crude and commodity prices on their growth and profit margins (IT, Banks)."

In addition, Emkay Global cited scope for a roughly 30 per cent, 20 per cent, 10 per cent cut in the aggregate FY23E PAT of auto, cement, consumer stocks, respectively in the Nifty.