
Can rising EPS estimates restore investor confidence despite tariff uncertainties?
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Mumbai: Investors may have a reason to cheer amid elevated uncertainties over the fallout of tariffs in the near term. Analysts have increased the earnings per share (EPS) estimates of most large companies following the March quarter, reversing two straight quarters of downgrades.Of the companies on the Nifty 500 index tracked by at least five analysts or more, 315 saw EPS upgrades in the fourth quarter compared with the December quarter, according to data from Eikon.EPS estimate upgrades signal improving earnings outlook, boosting investor confidence and often driving stock prices higher."After two consecutive quarters of disappointing earnings, we've now seen some early rounds of earnings upgrades from analysts across selective companies following the fourth quarter numbers," said Aniruddha Sarkar, chief investment officer and portfolio manager at Quest Investment Advisors. "Government capex picking up sharply in the last four months is largely responsible for the same, along with a pickup in consumer spending."Analysts had moderated the earnings outlook in the previous two quarters after profits slowed to single digits amid concerns over an economic slowdown. The EPS growth of Nifty 50 was at 4.1% in the June quarter and 8.9% in the September quarter from the year-ago periods. In January-March, EPS grew at 10.9% from the same period a year ago. The EPS growth for FY25 was at 9% year-on-year.Slowing corporate earnings and the resultant downgrades by analysts were reasons for the sell-off in Indian equities between September-end and March, as investors found stock valuations rich in the face of the squeeze in profitability. Money managers expect further recovery in earnings in the quarters ahead.The Nifty's EPS is expected to grow at about 13% on a compounded basis between FY25 and FY27, up from 10.9% in the fourth quarter, supported by a lower base of FY25, accommodative monetary policy, and continued government spending , said Nikhil Rungta, co-chief investment officer - equity at LIC Mutual Fund."Banks benefited from improved asset quality, while the auto sector saw steady domestic demand and successful new launches," he said. "Government-led capex supported infrastructure and real estate, and a rural demand revival boosted consumption."The pace of upgrades will be crucial for determining the direction of the market. "We believe the first quarter of FY26 could see some more modest upgrades but the pace of upgrades across the broader market could pick up from Q2 onwards as the low base of FY25 will come into play," said Sarkar.
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When inflation rises, a currency's purchasing power declines, prompting investors to seek refuge in assets like gold, which tend to retain their value. Supply and Demand Fundamentals: Global mining output, recycling activities, and demand from jewelry manufacturers and industrial applications all influence price discovery. Global mining output, recycling activities, and demand from jewelry manufacturers and industrial applications all influence price discovery. Appeal for Traders: Gold's consistent liquidity, sensitivity to global macroeconomic factors, and traditional safe-haven appeal make it a popular choice for short-term speculative trading and long-term hedging against economic instability. 2. Crude Oil: The Global Economy's Energy Powerhouse Crude oil, often dubbed "black gold," is the lifeblood of the global economy. As a primary energy source for transportation, industrial production, and electricity generation, its price fluctuations have far-reaching implications. 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Technological Advancements: Developments in extraction methods (like fracking) can increase supply, while advancements in renewable energy sources can influence long-term demand trends. Trading Avenues in India: Appeal for Traders: Crude oil's high volatility and sensitivity to a wide array of global events provide ample opportunities for speculative traders. Its direct impact on inflation and economic growth makes it a crucial commodity for macro-focused traders. 3. Silver: The Dynamic Industrial Precious Metal While often in the shadow of gold, silver firmly holds its own as both a precious metal and an industrial commodity. Its dual nature makes its price dynamics fascinating and frequently more volatile than gold. In India, silver is extensively used in jewelry, silverware, and various industrial applications, making it a prominent commodity in the trading landscape. Market Dynamics and Price Influencers: Industrial Demand: A substantial portion of silver's demand originates from industrial applications, including electronics, solar panels, the automotive industry, and medical devices. This makes its price highly sensitive to global industrial growth and technological advancements. A substantial portion of silver's demand originates from industrial applications, including electronics, solar panels, the automotive industry, and medical devices. This makes its price highly sensitive to global industrial growth and technological advancements. Investment Demand: Like gold, silver also functions as a safe-haven asset, attracting investment during economic uncertainty and inflationary pressures. Like gold, silver also functions as a safe-haven asset, attracting investment during economic uncertainty and inflationary pressures. Correlation with Gold Prices: Silver often moves in tandem with gold, though typically with higher volatility due to its smaller market size and significant industrial demand component. Silver often moves in tandem with gold, though typically with higher volatility due to its smaller market size and significant industrial demand component. Mining Output: Most silver is produced as a byproduct of mining other metals (such as lead, zinc, copper, and gold), making its supply somewhat inelastic to direct silver price changes. Most silver is produced as a byproduct of mining other metals (such as lead, zinc, copper, and gold), making its supply somewhat inelastic to direct silver price changes. Currency Fluctuations: Similar to gold, a stronger US dollar can make silver more expensive for international buyers, potentially impacting demand. Similar to gold, a stronger US dollar can make silver more expensive for international buyers, potentially impacting demand. Appeal for Traders: Silver's compelling combination of industrial utility and precious metal status makes it an attractive asset. Its higher volatility than gold can lead to larger profit opportunities, albeit with increased risk. 4. Natural Gas: The Evolving Transition Fuel Natural gas is an increasingly vital global energy source for electricity generation, industrial processes, and residential heating. Its clean-burning properties position it as a key transition fuel in the worldwide shift towards renewable energy. In India, growing domestic consumption and increasing industrial reliance on natural gas contribute significantly to its active trading on commodity exchanges. Market Dynamics and Price Influencers: Seasonal Demand: Natural gas prices are highly influenced by seasonal weather patterns, with demand typically peaking during colder winter months (for heating) and hotter summer months (for air conditioning, impacting electricity generation). 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