Indian stock market rally faces turbulence: Why exiting equities still may not be wise
Optimism improved as global markets advanced on hopes of progress towards resolving the Russia-Ukraine war. Sentiment was buoyed by diplomatic efforts, including US President Donald Trump's meetings with Ukrainian President Volodymyr Zelensky, European leaders, and earlier discussions with Russian President Vladimir Putin.
On the domestic front, Prime Minister Narendra Modi's announcement of a significant Goods and Services Tax (GST) reform further strengthened equities, pushing benchmarks higher.
Despite the recent positive momentum, concerns of volatility remain. Experts believe that the rally will be short-lived amid valuation and earnings concerns.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, noted, 'The White House talks indicate that there is a reasonable chance of ending the war. And, if this happens, the secondary tariff on India for buying oil from Russia would become irrelevant. This may turn out to be a positive from the market perspective. But it would be premature to expect positive responses from the Trump administration since the India-US relations are strained and India has been making tactical initiatives to improve relations with China even while reinforcing the already strong relations with Russia. Meanwhile, the policy initiatives from the Government on the GST front, with indications of next-generation reforms, have improved market sentiments significantly. However, the fundamentals (earnings growth) will take time to respond. A sustained rally in the market will happen only when we have indications of earnings revival.'
With short-term volatility still in play, should investors step back from equities, or do stocks continue to dominate for long-term growth?
Chethan Shenoy, Executive Director & Head - Product & Research at Anand Rathi Wealth, noted that while some volatility may persist, it is unlikely to be severe as 'much of the selling has already happened.'
He explained that the current news flow is emerging when markets have already found a base, which reduces the risk of a major downside from here. Instead of shifting fully to cash or overweighting gold, Shenoy suggested investors 'stick to their allocation strategy,' maintaining about 20 per cent of the long-term portfolio in debt or gold depending on preference, but not beyond that level.
Meanwhile, Ranju Rajan, Head of Managed Accounts at Axis Securities, believes volatility is likely to persist until tariff discussions reach a resolution and corporate earnings guidance and sentiments show improvement.
'A positive shift on these fronts should also translate into stronger momentum in credit growth, capex, and consumption—creating ample opportunities for stock selection and sector rotation. However, such volatility comes with opportunity. This will set the stage for selective opportunities to emerge in the long term.'
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Economic Times
2 minutes ago
- Economic Times
Tariffs aren't keeping Walmart from attracting shoppers and outpacing Target
AP Walmart powered through an uncertain economic environment and tariff concerns to deliver solid second-quarter financial results Thursday, showing it keeps pulling in shoppers and outpacing peers like Target. The nation's largest retailer reported a 4.6% quarterly increase in comparable sales - those coming from established stores and online channels. Company executives said Walmart was attracting customers, particularly higher-income shoppers who may have avoided its stores in the past, with fast deliveries, grocery discounts and trendier clothes. The company, based in Bentonville, Arkansas, also raised its annual profit and sales outlook. Walmart's results differed notably from those of rival Target, which on Wednesday reported another quarter of comparable sales declines. The Minneapolis-based company has struggled to find its footing as customers defect to Walmart and other stores where they think they will find greater bargains and increasingly, the same or better merchandise. Target's board of directors named a 20-year company veteran on Wednesday to succeed CEO Brian Cornell when he steps down after 11 years in early 2026. Walmart said its profitable e-commerce operations, advertising revenue and selection of products with high profit margins have given it flexibility to absorb extra costs from the range of tariffs President Donald Trump has put on foreign products. Walmart CEO Doug McMillon told investors Thursday that the impact of tariffs also has been gradual enough to mute changes in consumer spending behavior. When the discounter raised prices on certain items, it's observed lower- and middle-income customers trading down to lower-priced options or foregoing purchases, he said. The company will continue to see its costs increase as it replenishes inventory at post-tariff price levels, McMillion said. "We're doing what we said we would do," he said. "We're keeping our prices as low as we can for as long as we can. Our merchants have been creative and acted with urgency to avoid what would have been additional pressure for our customers and members." A growing list of companies, including Procter & Gamble, Cosmetics, Black & Decker and Ralph Lauren, told investors in recent weeks that they planned to or already had raised prices because of tariffs, though modestly. None of that has derailed consumer spending. Shoppers spent at a healthy pace in July, particularly at the nation's auto dealerships, as signs emerged that President Donald Trump's trade policies were taking a toll on jobs. Some of that spending may have been shoppers buying furniture and other imported items to get ahead of expected price increases, analysts said. On Tuesday, Home Depot, the nation's largest home improvement retailer, reported improved sales during its latest quarter as consumers remained focused on smaller projects. Like Walmart, Home Depot's performance missed Wall Street's expectations. The Atlanta-based company also said shoppers should expect modest price increases in some categories as a result of additional costs from tariffs, which are taxes on imports. Home Depot reported comparable sales increase of 1.4% in line with what home improvement rival Lowe's reported on Wednesday. But it's Walmart that serves as a barometer of spending given its outsized power in American retailing. The company maintains that 90% of US households rely on Walmart for a range of products, and more than 150 million customers shop on its website or in its stores every week. Walmart said in May that prices had started to increase in late April and got higher in May. But it said Thursday that it had introduced 7,400 price rollbacks, or temporary discounts, across the aisles in the latest quarter. The company said it earned $7.03 billion, or 88 cents per share, for the three-month period that ended July 31. That compares with $4.50 billion, or 56 cents per share, a year ago. Sales rose nearly 5% to $177.4 billion. Walmart's 4.6% growth in US comparable sales during the second quarter was slightly higher than its first-quarter gain of 4.5%. Groceries and health and wellness items fueled the growth, the company said. Global ecommerce sales rose 25%, above the 22% growth in the first quarter. The retailer said roughly one-third of deliveries from its US stores in recent weeks were orders requesting delivery in three hours or less, and 20% of those orders made it to customers in a half-hour or under. Despite Walmart's solid quarter, its stock price was down close to 5% late Thursday morning as its earnings per share came in below what analysts had expected. Analysts were expecting 73 cents per share on sales of $175.93 billion for the quarter, according to FactSet. Per share results, excluding effects of charges related to certain legal matters and from business restructuring, was 68 cents, Walmart said. One $450 million expense was tied to settlements over worker and shopper injury claims, Walmart said. A company spokesperson said the cost per claim was increasing but not the total number. For the year, Walmart raised its per-share estimates to a range of $2.52 to $2.62, up from a previous estimate of $2.50 to $2.60. It said 2025 sales are anticipated to increase 3.75% to 4.75%, more than it projected in May. Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. How an auto giant trapped global investors in an INR1,000 crore heist Fortis Healthcare still heals portfolios, but valuations are running hot. Swiggy, Tencent backer Prosus gets Rajinikanth fan to script India AI play IndiGo's GIFT City unit: Simple expansion or is there more to it than meets the eye? Stock Radar: Rico Auto stock showing signs of bottoming out after about 40% fall from highs; what should investors do now? GST rationalization: You don't become irrational; 10 stocks, from two sectors, some may get more, some less, some nothing Focus on core business and ignore the rest: 5 small-caps from different sectors with upside potential of up to 48% Multibagger or IBC - Part 20: An ICE-to-EV pivot is transforming this small-cap auto ancillary company
Economic Times
2 minutes ago
- Economic Times
Trump hails 'total victory' as US court quashes $464 mn civil penalty
Agencies US President Donald Trump A US court threw out Thursday a $464 million civil penalty against President Donald Trump imposed by a judge who found he fraudulently inflated his personal worth, calling the sum "excessive" but upholding the judgment against Arthur Engoron ruled against Trump in February 2024 at the height of his campaign to retake the White House, which coincided with several active criminal prosecutions that the Republican slammed as "lawfare.""It was a Political Witch Hunt, in a business sense, the likes of which no one has ever seen before," Trump said on his Truth Social platform Thursday, adding that "everything I did was absolutely CORRECT and, even, PERFECT."When Engoron originally ruled against Trump, he ordered the mogul-turned-politician to pay $464 million, including interest, while his sons Eric and Don Jr. were told to hand over more than $4 million judge found that Trump and his company had unlawfully inflated his wealth and manipulated the value of properties to obtain favorable bank loans or insurance terms. Alongside the financial hit to Trump, the judge also banned him from running businesses for three years, which the president repeatedly referred to as a "corporate death penalty."On Thursday, five judges of the Appellate Division of the New York Supreme Court upheld the verdict, but ruled that the size of the fine was "excessive" and that it "violates the Eighth Amendment of the United States Constitution."The Eighth Amendment prohibits excessive or cruel punishments and penalties.- 'Massive win! - State Attorney General Letitia James, who brought the initial case, vowed to take Thursday's ruling to the state's highest court, the New York Court of Appeals. Thursday's appeals court ruling "affirmed the well-supported finding of the trial court: Donald Trump, his company, and two of his children are liable for fraud," James added. Following the initial verdict, Trump subsequently sought to challenge the civil ruling as well as the scale and terms of the penalty, which has continued to accrue interest while he repeatedly condemned the case and the penalty as politically son Don Jr. termed the appellate court ruling a "massive win!!!" "New York Appeals Court has just THROWN OUT President Trump's $500+ Million civil fraud penalty! It was always a witch hunt, election interference, and a total miscarriage of justice... and even a left leaning NY appeals court agrees! NO MORE LAWFARE!" he wrote on X. During hearings, conducted without a jury under state law, Trump accused then-president Joe Biden of driving the case, calling it "weaponization against a political opponent who's up a lot in the polls."As the case was civil, not criminal, there was no threat of economic advisor Peter Navarro said at the White House Thursday that "James is another one that belongs in jail," referring to the New York attorney general."The Democrats really overplayed their hand on this because they thought they could take Donald Trump out," he said.
Hindustan Times
5 minutes ago
- Hindustan Times
Assam decides to stop issuing new Aadhaar cards to adults after one-month window
SILCHAR: Assam chief minister Himanta Biswa Sarma on Thursday said that people in Assam will have a one-month window from September 1 to apply for the 12-digit Aadhaar identity number before the issuance of fresh cards to adults is stopped as a precautionary measure to ensure that illegal immigrants from Bangladesh do not obtain the identification number in the future. Assam chief minister Himanta Biswa Sarma (ANI) Only a one-month window from September 1 will be given to them to apply for an Aadhaar card if anyone has not got the document yet, he told reporters after a Cabinet meeting here. Already, the chief minister said, Assam has reached the saturation point. The new order will take effect from October 1, with exceptions for Scheduled Castes (SC), Scheduled Tribes (ST) and Tea Tribes, the chief minister told reporters. 'This is a precautionary measure to ensure no illegal foreigner can become an Indian citizen in the future. It is irrespective of religion or any other criteria. We are committed to safeguarding Assam from infiltration,' Sarma said. The chief minister pointed out that Aadhaar enrolment in Assam has already exceeded the population count. 'The saturation among the general population is 102 per cent, which means the number of cards is higher than the number of people. But in the case of Tea Tribes, SC and ST, saturation is only 96 per cent, which is why they need more time,' he explained. Sarma said a genuine Indian adult who has been left out could approach the district commissioner, who would have to verify their credentials and approve issuance of Aadhaar in the 'rarest of rare' circumstances. The chief minister recalled the state's continuous crackdown on illegal immigration from Bangladesh. 'In the last one year, we have been detaining and deporting illegal Bangladeshi immigrants almost every day. Just yesterday, seven people were deported. But we cannot rule out the possibility that some may have slipped through. This restriction will act as a deterrent measure,' he said. Sarma said Assam's demography had undergone stark changes in the past. 'In many areas, indigenous Assamese people have lost jobs, land and other facilities to illegal migrants. During eviction drives, they have even attacked government officials. In Uriamghat, 12,000 to 15,000 people gathered to resist officials. Many were not locals... This shows a larger conspiracy, and we are fighting against it,' he alleged. He also argued that there is hardly any need for new Aadhaar enrolment among adults, as most of them already have the identity card. 'Only children and newborns now require Aadhaar enrolment,' he said. Following the National Register of Citizens (NRC) exercise in 2018, more than 2.66 million people in Assam were initially denied Aadhaar cards. However, the Supreme Court later allowed them to obtain the card.
