Will the party continue in the Indian market? Arvind Sanger answers
, Founder,
Geosphere Capital Management
,
says India is poised to finalize a
trade
deal with the US swiftly, potentially being the first. While recent March quarter figures weren't outstanding, improvements in incremental data could make India's FY26 growth narrative compelling. Despite near-term global trade war concerns, non-consensus moves in gold, US markets, or the dollar are possible, potentially impacting emerging markets and other outperforming regions like Europe and Japan.
We will talk about autos and we will talk about EVs, but in general, April has been a good month for Indian markets. Will the party continue?
Arvind Sanger:
Obviously, things that went well for India in the trade war. India was seen as a winner. Secondly, the US dollar was weakening and investors were looking to diversify away from the US. Those were some very powerful trends that India benefited from. Now, if the US starts to sign deals with a number of countries and the market starts to stabilise, then maybe even the dollar starts to stabilise and the big kahuna is what is going to happen with China. Clearly, the signals from the Trump administration are very clear. The US wants to do a deal with China and China has been playing a little bit of a tough game as they are trying to get a favourable positioning pre-talks to be able to do a deal.
But if May is the month where some kind of a China deal is struck with significant reduction in tariffs – even if they end up at 50% or whatever – then we could see at the margin both the dollar stabilise and maybe China benefit a little more. So, very short term, it could cause some money to flow in those two directions.
But directionally, it is looking like India is going to get a deal done very quickly. It may even be the first one. That is nice, but that is not the real story. The real story is what is going on with the India growth story. Obviously, the March quarter numbers have not been stellar. But if we see incremental data at the margin starting to improve, then the India growth story for FY26 starts to look interesting and that is really going to be the determinant beyond the very near-term noise of global trade war as to how the Indian market does.
Do you see a case where in the near term like a couple of months, maybe for a quarter or so, emerging markets could underperform and developed markets could come back because this whole script of why the US will not do well and why EMs should do well is becoming public knowledge now?
Arvind Sanger:
Yes, it has become a bit of a consensus trade. I do not know if it will last the anti-consensus trade, or whether that will last for a whole quarter, but it certainly could last for a month. It is often said that the maximum pain markets move in opposite directions to inflict pain and if the consensus is so widely in one direction, then it is quite likely that you could get a non-consensus move, a non-consensus selloff in gold, or a non-consensus rally in US markets, maybe even a non-consensus rally in dollar.
Live Events
You Might Also Like:
Rs 37,600 crore in 11 days! FIIs are flooding Indian stocks with cash but will it last?
Again, these are very short-term trends, but it would not surprise me that what has happened in the last few days in the US market continues for a bit and that does take some of the bloom off the emerging markets' frenzy and frankly even Europe and Japan have outperformed. So, we could see a bit of a non-consensus trade happen for a few weeks, but fundamentally long term it may be a different story. Near term, who knows? Your call is quite interesting that we could get a non-consensus move in US markets.
The way the global setup is looking at this point in time, we are marred by volatility and you were also talking about how the market rally will now be determined going ahead. One key point to note is the way how the foreign investors are allocating their funds. There is too much uncertainty. There will be an economic impact as well and that money is now slowly once again trickling back into India and emerging markets. India was not that much of a preferred bet for them. But do you think now decisively that money will continue to come into India given the relentless FII buying over the last 10 odd days?
Arvind Sanger:
You have to step back a little bit and look at the length of these cycles. From the beginning of '99 through the end of 2007, Nifty was up like over 500%. The US market was up 50%. So, this is not new that you get this massive cycle. Look back at the data for that eight or nine years for the Indian market and the Chinese market did even better. So, EMs had a huge run in that period and the US market did nothing and it was not like the US economy was in the toilet or anything like that. These cycles went on for a long time and then in 2009, the US had the financial crisis. The US financial system had almost gone bankrupt and after eight or nine years of huge underperformance by the US, who would have said that for the next 15 years the US market would beat every other market in the world?
So, these cycles last for a long time. But within those cycles, it is not a straight line. You will have months and quarters where you get counter cyclical moves. If you ask me to tell you whether the counter cyclical move would be short term or medium to long term, I would say medium to long term. I do not know if India will be the big winner or some other emerging market will be the big winner. When the US market moved up by the end of last year, 50% of the world's market cap was in the US market. That was the peak that we came last in 2000 and at the end of 2024. These cycles tend to have long legs for a long period of time and India and other emerging markets that do well in terms of economic performance are poised to benefit from funds flow redirecting to a more normal long-term cycle because these cycles turn and then they go for a long time.
You Might Also Like:
US dollar declining, global markets decoupling from the US market: Rupen Rajguru
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Hindu
20 minutes ago
- The Hindu
Resign from Lok Sabha if have no faith in Election Commission of India: BJP to Rahul
The BJP on Saturday (August 9, 2025) said Congress leader Rahul Gandhi must resign on "moral grounds" from the membership of the Lok Sabha if he does not have faith in the Election Commission, and flayed him for not submitting a written declaration on his "vote theft" claim. BJP national spokesperson Gaurav Bhatia also asked Congress Parliamentary Party chairperson Sonia Gandhi and party MP Priyanka Gandhi Vadra to resign as members of the Rajya Sabha and Lok Sabha if they do not have any faith in the polls. "You (Rahul Gandhi) make baseless allegations before the media and then refuse to give proof and a written declaration when the constitutional body asks for it," Mr. Bhatia said at a press conference at the BJP headquarters in New Delhi. Reading out excerpts of a past Supreme Court judgement, the BJP spokesperson said the apex court had observed that there was no doubt about the bona fides of the Election Commission and that it was a matter of record that the poll body had built a reputation as an impartial body over the years. "Rahul Gandhi, if you don't trust the election commission and the observations made by the Supreme Court, do one thing: first, you resign from the Lok Sabha membership. Priyanka Gandhi, you also resign. Sonia Gandhi, you also resign at least on moral grounds because you are raising questions on the same Election Commission," Mr. Bhatia said. "Then, you go to the Supreme Court, the high court and people," he said. Mr. Bhatia also demanded that the Chief Ministers of Congress-ruled Karnataka, Telangana and Himachal Pradesh must also resign, for their top leaders had no faith in the ECI. "Whatever suits you, you accept. Whatever is inconvenient, you reject and cast aspersions on the Election Commission. This will not work," Mr. Bhatia said. Mr. Gandhi on Friday (August 8, 2025) asserted that he had taken the oath inside Parliament on the Constitution, as a response to the EC demanding from him an affidavit under oath over his "vote chori" claim. Addressing the Vote Adhikar Rally in Bengaluru, he also said the Karnataka government should probe the inclusion of fake voters in the State during the 2024 Lok Sabha election. "The ECI asks me to file an affidavit and give information under oath. I have taken oath inside Parliament, in front of the Constitution, on the Constitution," he said. Mr. Bhatia termed Mr. Gandhi's "vote theft" claim a lie: "'Rahul aka 'arajak tatva' (anarchic element) has now become Rahul aka 'vidhwansak' (destroyer). He wants to destroy the Constitution of India and Indian democracy." He also accused the Leader of Opposition in Lok Sabha of being "immature" and starting a war against constitutional institutions by threatening ECI officials.
India.com
20 minutes ago
- India.com
SEBI Proposes Easier Norms For Resident Indian Participation In FPIs
New Delhi: The Securities Exchange Board of India has proposed easier norms for resident Indians and mutual funds to invest in foreign funds. The regulator proposed to enable retail schemes based in IFSCs in India with resident Indian non-individuals as sponsors or managers to register as FPIs. The investment limit is capped at 10 per cent of the targeted corpus, in line with IFSC rules, a release from SEBI said. The suggestion is to replace the sponsor and manager with a fund management entity or associate for IFSC FPIs. SEBI has also proposed allowing Indian mutual funds to invest in overseas funds with India exposure. These proposals aim to increase investment options for Indian investors to diversify their portfolios. If implemented, these reforms could bridge the gap between India's domestic savings pool and international opportunities. Currently, only certain institutional investors meeting SEBI's criteria can register as FPIs to invest in foreign securities. The proposed changes focus on retail-oriented investment schemes set up in IFS, which would allow a broader range of India-based entities to channel domestic capital into foreign assets through a regulated framework. At present, non-resident Indians (NRI), overseas citizens of India (OCI) or resident Indians are not eligible to register as FPIs. However, NRIs, OCIs or resident Indian individuals are permitted to be constituents of FPIs, subject to certain conditions in terms of limits on contribution and control of the FPIs. The Reserve Bank of India's liberalised remittance scheme permits individuals to remit up to Rs 2.5 lakh annually for overseas investments. Retail investors depend on indirect channels and FoF opportunities in global mutual funds for foreign market exposure. IFSC is a special economic zone (SEZ) acting as a global financial hub within India, allowing institutions to conduct international financial transactions and operations. The capital market regulator has sought public feedback on its proposals till August 29.
Time of India
20 minutes ago
- Time of India
Industry body ISMA backs ethanol-blending programme, dismisses misinformation
The Indian Sugar and Bio-Energy Manufacturers Association (ISMA) has strongly defended the country's ethanol-blending programme amid 'misleading' claims from some quarters about its impact on vehicle engines. In a statement, ISMA said the E20 fuel blend, 20 per cent ethanol mixed with petrol, has undergone rigorous testing by Oil Marketing Companies (OMCs) and has been certified by the Automotive Research Association of India (ARAI) as fully compatible with Indian vehicles. Automobile manufacturers are already producing E20-compliant models, the association noted. Referring to Brazil's decades-long use of ethanol blends from E20 to E100 without major issues, ISMA highlighted that the South American nation currently blends over 27 per cent ethanol in petrol and is targeting 30 per cent by 2030. "Ethanol-blended fuel is not just a technological choice--it is a national imperative. Backed by rigorous scientific validation and decades of global experience, it delivers clear benefits for our farmers, our economy, and our environment," ISMA Director General Deepak Ballsaid in the statement. From an economic perspective, the ethanol blending programme has become a "game changer" for over five crore sugarcane farmers , with more than Rs 1.18 lakh crore transferred to them. ISMA argued that the blending of ethanol with petrol improved the financial health of sugar mills, ensured timely payments to farmers, and helped manage excess sugar inventories, ultimately stabilising sugarcane prices and protecting farmer incomes. The E20 target is also expected to save Rs 35,000-40,000 crore in foreign exchange annually by reducing crude oil imports, which account for over 85 per cent of India's consumption. "The recent negative campaign on social media against ethanol-blended fuels is not only misleading but also detrimental to a nationally important programme," the ISMA statement noted. Earlier this week, the Ministry of Petroleum and Natural Gas had also dismissed recent claims circulating on social media that E20 petrol causes a drastic drop in fuel efficiency , besides impacting the engines. The ministry clarified that while ethanol has a lower energy density than petrol, the impact on fuel efficiency is only marginal. In 2014, the ethanol blending was just 1.53 per cent. By 2022, India achieved 10 per cent blending, five months ahead of schedule. The original target of 20 per cent blending (E20) by 2030 was advanced to 2025 and has already been achieved in the current Ethanol Supply Year.
