Chatting with ETNow, in an interview, Agarwal stated that fiscal measures and world cues are setting the stage for a possible rebound.
Reflecting on earlier recommendation to deal with dips as shopping for alternatives, Agarwal famous that buyers who adopted this method at the moment are seeing the advantages. “Sure, as you rightly put a variety of issues have occurred in the previous couple of weeks and months, and particularly, the expansion challenges that India was going through have been dealt with fairly properly, particularly with the GST fee cuts,” he stated.
In keeping with him, the mixture of direct tax cuts earlier this 12 months and recent GST reductions is probably going to present consumption a significant enhance. Nevertheless, he flagged the India-US commerce negotiations because the “solely main subject” at present weighing on sentiment.
“As soon as that deal goes via and this 50% tariff comes down considerably, that will be each constructive on the commerce facet, the foreign money facet, and extra importantly on the movement facet as properly,” Agarwal added.
FIIs prone to return after a interval of outflows
Overseas investor exercise stays a key focus, particularly after the U.S. Federal Reserve trimmed charges by 25 foundation factors. Whereas FIIs have pulled out almost $20 billion this 12 months, home institutional buyers have stepped in with greater than $60 billion, serving to cushion the markets.
Agarwal identified that India’s underperformance versus world benchmarks has already been priced in. “In final one 12 months, India has underperformed the rising market index by over 30% and the MSCI world index by over 25%. This sort of one-year underperformance we have now not seen within the final 15-20 years,” he stated.
With first-quarter outcomes exhibiting a ten% earnings development for the Nifty 500, Agarwal believes fundamentals are turning a nook. He additionally famous that India’s valuation premium to world markets has cooled to 9%, in contrast with a long-term common of 15%. “We do count on the FII numbers additionally to return again. The shot within the arm can be as and once we get that commerce deal achieved,” he pressured.
Sectoral Shifts: Alternatives past index heavyweights
On sectoral preferences, Agarwal noticed that conventional index heavyweights—oil and fuel, IT, FMCG, and banking—are exhibiting restricted development, although banking could profit as soon as credit score and deposit development revive.
The actual motion, he argued, lies in rising sectors. “The sectors which are exhibiting bigger development, a few of them are literally not there within the main indices, the likes of shopper discretionary led by retail in addition to autos, a variety of web and platform-based corporations, the buyer discretionary companies, the likes of capital markets, the journey, fertilisers, chemical compounds and within the industrial area the defence and energy,” Agarwal stated.
As India navigates world uncertainties and awaits progress on commerce negotiations, the mixture of tax reforms, Fed easing, and enhancing earnings is offering buyers with renewed confidence available in the market’s resilience.
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