New Delhi, March 6 -- The Indian market has been facing challenges with elevated valuations and rising apprehensions regarding the possible impact of AI on IT services exports and consumption, according to a report by Kotak Institutional Equities.

The sharp rise in tensions between Iran and the US, worries about a broader conflict in the Middle East, and increasing crude oil prices are expected to further stifle investment sentiment for India, as per the brokerage firm.

An increase of US$10 per barrel in crude oil prices, along with a corresponding rise in gas prices, would result in an additional US$22 billion to India's current account deficit (0.55%), the brokerage emphasized.

The Nifty 50 Index is currently priced at 20 times the e...