Latest news with #AnirudhGarg
Time of India
3 days ago
- Business
- Time of India
Dollar strength, geopolitics & yields – the triple threat roiling Indian markets: Anirudh Garg
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel As Indian markets navigate a phase marked by heightened volatility, investors are grappling with a triple threat—dollar strength, geopolitical tensions, and rising U.S. bond global headwinds, combined with domestic uncertainties, are reshaping capital flows and risk appetite. In this edition of, we speak with Anirudh Garg, Partner & Head of Research at INVasset PMS, who breaks down the key macro triggers unsettling Dalal tactical shifts in portfolio strategy to his take on IPOs, SME exuberance, and sector-specific opportunities like defence and real estate, Garg offers a data-driven perspective on how investors can navigate the storm and uncover long-term value. Edited Excerpts –A) Volatility on D-Street today is driven by multiple overlapping factors rather than a single cause. While fears around the U.S.-China tariff war persist, their intensity has eased somewhat after a U.S. court struck down Trump's reciprocal tax policy, removing one source of uncertainty. However, the broader strategic competition remains, with ongoing tensions around trade, technology access, and Taiwan keeping investor sentiment fragile. Mixed signals from policymakers—balancing trade talks and tariff threats—fuel swings in risk the recent India-Pakistan conflict, though not a full-scale war and swiftly contained by India's decisive response, added short-term volatility. Meanwhile, global monetary tightening, especially by the U.S. Federal Reserve, is tightening liquidity and raising borrowing costs, putting pressure on risk assets stronger U.S. dollar also plays a key role by increasing the cost of capital for emerging markets, prompting capital flows away from equities toward safer dollar-denominated assets, further amplifying market fluctuations. For India, these external shocks coincide with domestic challenges including inflation trends, RBI policy stance, and corporate earnings uncertainties, layering complexity onto market INVasset, our quant-driven, algorithmic approach continuously monitors sectoral and stock-level shifts to adjust portfolio exposure dynamically, capturing opportunities amid volatility while managing downside risks. Such fluctuations are a natural part of the evolving global risk framework investors must navigate today.A) The recent rise in U.S. bond yields, with the 10-year Treasury touching 4.43% and the 20-year nearing 4.94%, signals a shift in global capital flows and investor sentiment. Higher yields make U.S. debt more attractive, prompting potential capital outflows from emerging markets like creates pressure on the Indian rupee, which tends to weaken against a stronger dollar, raising import costs—particularly crude oil—and fueling imported inflation. The RBI faces a delicate balancing act, as elevated global yields limit its flexibility to ease domestic interest rates without triggering capital Indian equities, this environment tends to increase volatility. Sectors reliant on imports or capital-intensive businesses may face margin pressures, while export-driven industries could benefit from a weaker rupee, gaining competitiveness INVasset, we actively monitor these dynamics through a dynamic asset allocation framework, rotating into sectors likely to benefit from currency shifts and higher yields.A)Managing volatility is a core tenet of our strategy at INVasset, especially amid today's complex market environment. We rely on a data-driven, algorithmic approach that continuously scans over 1,500 stocks using 170+ parameters, enabling nimble portfolio adjustments grounded in real-time relative changes and sector we increased exposure to the textiles sector, anticipating benefits from the advancing India-UK Free Trade Agreement, which promises tariff reductions and export growth. This move diversifies risk and taps into a structural growth theme amid global trade we've strengthened allocations in financial intermediaries and stock brokers, sectors benefiting from rising retail participation and digitization. These companies offer recurring revenues that help dampen tensions between India and Pakistan have also prompted a tactical increase in select defence stocks, aligning with national priorities and providing defensive portfolio ballast during uncertain market-driven valuation dips have created entry points in quality financial firms with strong fundamentals, further balancing risk and proprietary quant algorithm ensures these tactical shifts are unemotional and disciplined, capturing alpha while controlling downside. This systematic agility allows us to navigate volatility proactively, positioning portfolios to benefit from both macro trends and emerging opportunities.A) The March quarter results for India Inc. painted a nuanced picture, reflecting sector-specific trends and broader macroeconomic Defence sector stood out with a strong performance, driven by heightened government focus on modernization and renewed geopolitical tensions, which bolstered order books and Financial Services sector demonstrated robust resilience, buoyed by strong banking results, asset management growth, and increasing retail participation, contributing to healthy gains. Metals benefited from a global recovery in demand and sustained infrastructure spending, translating into volume growth and margin Oil & Gas firms capitalized on favorable crude prices and domestic demand growth, which improved refining margins and petrochemical the flip side, sectors like Healthcare and Automobiles faced challenges. The healthcare industry grappled with rising input costs and regulatory pressures, impacting margins and earnings automobile sector experienced subdued demand both domestically and in export markets, leading to flat or declining sales and pressured mixed results reinforce the importance of a diversified and selective investment strategy that emphasizes sectors benefiting from structural tailwinds—such as defence modernization, financialization, and global commodity cycles—while cautiously navigating those facing cyclical or regulatory long-term investors, focusing on themes backed by strong government support, evolving consumer trends, and global demand recovery offers the best risk-adjusted opportunities in the current environment.A) The Reserve Bank of India (RBI) has adopted a cautiously accommodative stance as it balances its twin mandate of controlling inflation and supporting growth. In April 2025, retail inflation has moderated to 3.16%—its lowest since mid-2019—thanks to easing food prices and subdued demand the Indian economy is on a robust footing, with FY25 Q4 growth expected near 6.9%, driven by agriculture and strong consumer demand. The current account deficit remains manageable at 1.1% of GDP for 3Q FY25, underpinned by stable services exports and these conditions, the RBI cut the repo rate by 25 basis points to 6.25% on 7th February, marking the first easing move in five years. Market expectations, supported by Reuters polls, point to a likely further 25 basis points cut in June, with potential additional easing later in the year, all key variables guiding future rate decisions will be inflation trajectory, sustained economic growth, and external sector stability. If inflation remains benign and growth steady, RBI's room to ease rates further is global uncertainties and potential external shocks will warrant cautious monitoring. Overall, India's monetary policy outlook is poised to support growth while maintaining vigilance on inflation and macro stability.A) India's IPO market has seen a notable resurgence recently, driven by renewed investor interest and companies seeking growth capital. While many IPOs have posted spectacular listing-day gains, often fueled by retail enthusiasm and market momentum, we at INVasset maintain a cautious represent a distinct asset class, and initial exuberance frequently leads to price volatility and corrections as companies take time to prove their operational and financial approach emphasizes patience, allowing these firms to 'get cooked' over several quarters before considering investment, thereby aligning valuations with sustainable like Ather Energy and select SME IPOs demonstrate the typical pattern of sharp listing gains followed by periods of earnings digestion and volatility. Given that many IPO valuations already price in strong growth expectations, premature entry risks capital erosion if execution waiting for consistent revenue growth, profitability, and cash flow visibility, we reduce downside risks and identify quality companies at reasonable essence, while IPOs offer exciting opportunities, disciplined, fundamentals-driven investing remains paramount, reflecting our broader philosophy of measured, data-driven portfolio construction geared toward long-term value creation.A) The SME IPO segment has gained traction in 2025, but at INVasset, we remain cautious due to liquidity constraints and valuation concerns. Many SME stocks suffer from thin trading volumes post-listing, limiting exit options and increasing volatility valuations often reflect speculative exuberance rather than fundamental strength, leading to inflated listing gains that are unsustainable. While some SMEs have solid business models, the market's hype obscures true efforts aim to improve transparency, but structural challenges persist. Hence, we prefer mainboard stocks with robust liquidity and earnings visibility for disciplined, long-term investing.A) Beyond high-growth sectors, the old economy industries—such as manufacturing, railways, power, and defense—are now presenting compelling value opportunities following recent market corrections. These sectors stand to benefit from sustained government capital expenditure focused on infrastructure modernization, strategic self-reliance, and enhanced correction has improved valuation comfort, making these fundamentally strong areas attractive for long-term investors seeking quality at reasonable rate–sensitive sectors like real estate also offer promising entry points amid easing monetary policy and improving demand by urbanization and affordable housing initiatives, real estate remains a vital component of India's growth story. Together, these sectors blend secular growth with cyclical recovery, providing a balanced portfolio who focus on financially sound companies within these old economy themes can capture the upside potential of India's ongoing investment wave, while effectively managing economic and policy risks.A) The recent geopolitical tensions between India and Pakistan have once again highlighted the strategic importance of India's defence sector. At INVasset, we remain bullish on defence as a core portfolio theme, driven by robust government spending and a clear focus on self-reliance under the Atmanirbhar Bharat government is aggressively expanding the Indian Navy and modernizing missile systems, which bodes well for domestic defence manufacturers. This renewed urgency ensures strong order pipelines and revenue visibility for companies in this Reach Shipbuilders & Engineers (GRSE) stands out as a prime example. Despite a market cap of around ₹30,000 crore, GRSE currently holds an order book of ₹25,000 crore and recently secured an additional ₹25,000 crore in new company is also eyeing another ₹40,000 crore in prospective orders. This large and growing backlog reflects India's focus on building a strong indigenous naval fleet and makes GRSE a key beneficiary of the defence modernization drive, with stable long-term cash the missile front, Bharat Dynamics Limited (BDL) has delivered critical capability with its Akash surface-to-air missile system, successfully countering drones and missiles during recent skirmishes. This proven technology has also attracted interest from Southeast Asian countries facing regional security challenges, opening promising export India emerges as a reliable defence exporter, companies like BDL are well positioned to benefit from both domestic demand and growing international markets. Defence is not just a sector; it is a strategic growth story with strong fundamentals.(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
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Business Standard
08-05-2025
- Business
- Business Standard
Stock Market LIVE Updates: GIFT Nifty signals lower start for India; Asia-Pacific markets gain
Sensex Today | Stock Market LIVE Updates: Indian stock markets are likely to be cautious after the US Fed held rates steady overnight, while risks of an escalation between India and Pakistan persisted Stock Market LIVE Updates, Thursday, May 8, 2025: Indian stock markets are likely to be driven by the US Federal Reserve's decision to stand pat on interest rates overnight as risks of higher inflation and increasing unemployment persist. Apart from that, fears of an escalation in the tense situation between India and Pakistan after India struck nine terror camp targets in Pakistan and Pakistan occupied Kashmir are also likely to weigh on sentiment, while investors will also keep an eye on fourth quarter results from companies, including Larsen & Toubro and Britannia Industries, among others. At 6:47 AM, GIFT Nifty futures were trading at 24,377, around 85 points behind Nifty futures' last close. In other news, Anirudh Garg, partner and fund manager at Invasset PMS, tells Business Standard that sustaining inflows from foreign funds will depend on stabilising global conditions, easing valuations and the relative attractiveness of Indian growth, amid persistent geopolitical uncertainties and tariff war fears. READ MORE Separately, the National Stock Exchange (NSE) has received in-principle approval from the Securities and Exchange Board of India (Sebi) to launch electricity derivatives, the company's management said during an analyst call on Wednesday following the fourth-quarter earnings announcement. READ MORE In the primary markets today, the basis of allotment for Srigee DLM IPO (BSE SME) and Manoj Jewellers IPO (BSE SME) are expected to be finalised today. 7:19 AM Stock Market LIVE Updates: Wall Street ends higher; US Fed holds rates Stock Market LIVE Updates: US markets closed higher overnight amid choppy trading. The S&P 500 added 0.43 per cent to close at 5,631.28, the Nasdaq Composite gained 0.27 per cent to end at 17,738.16, and the Dow Jones Industrial Average climbed 0.70 per cent settle at 41,113.97. US futures were higher after the US Federal Reserve's Federal Open Market Committee held its benchmark overnight borrowing rate in a range between 4.25 per cent to 4.5 per cent. Futures tied to S&P 500 climbed 0.44 per cent, Nasdaq 100 futures gained 0.66 per cent and Dow Jones futures were higher by 0.25 per cent. First Published: May 08 2025 | 7:11 AM IST
Time of India
23-04-2025
- Business
- Time of India
Smart accumulation or euphoria? Retail investors hike stakes in 363 smallcap stocks in Q4
Retail investors raised their stakes in 363 stocks within the BSE Smallcap index during the January–March quarter, while reducing holdings in 361 stocks, according to Ace Equity data analyzed by ETMarkets. This near-even split suggests a cautious return of risk appetite, with investors engaging in selective buying after a sharp correction, though without signs of irrational exuberance. The BSE Smallcap index, which represents the bottom 15% of the total market capitalization of the BSE AllCap, includes 939 stocks. Of these, shareholding data for 730 companies as of the March quarter is available, while the rest are yet to disclose their latest shareholding pattern. The most notable increases in retail holdings were seen in Vakrangee (up 6.5%), One Mobikwik Systems (up 6.3%), and Spandana Sphoorty Financial (up 6%). In 66 other stocks, the retail holding has gone up by 1% or more and up to 4.94%. Some of these stocks include Dreamfolks Services, DAM Capital Advisors, EKI Energy Services, Jindal Drilling & Industries, Samhi Hotels Aarti Pharmalabs, Hindustan Construction Company, Barbeque-Nation Hospitality, KRN Heat Exchanger and Refrigeration and Computer Age Management Services (CAMS). The other widely tracked smallcap stocks that have seen retail ownership go up QoQ in the quarter gone by are PVR Inox, Jupiter Wagons, Balu Forge Industries, Can Fin Homes, Texmaco Rail & Engineering, Angel One, and Sobha between 2.2% and 0.92%. By retail ownership, we mean individual investors holding shares worth Rs 2 lakh in a company. "The rise in retail holdings across smallcaps signals a return of risk appetite post the sharp correction earlier this year. Trump's tariff pause was the catalyst—but what's striking is the selectivity as investors are clearly differentiating, not rushing blindly. This isn't euphoria—it's opportunistic repositioning after valuations reset," Anirudh Garg, Partner and Fund Manager at Invasset PMS, said, commenting on the prevailing trends. To give some perspective, the BSE Smallcap index fell 29% from a peak of 57,827.69 on October 1, 2024, to hit the lows of 41,013.68 on April 7, 2025. While they are still down 18% (index level) from the peak, smallcaps have clawed back from the bear territory. A 20% or higher fall is seen to be a bear zone for stocks/indices. Kush Gupta, Director at SKG Investment & Advisory expects the trend of increased retail shareholding to last longer than one expects. In his view, investors remain confident about the space notwithstanding a one-sided correction for the past 4 months, which led to 40-50% downfall in prices of several stocks. "We are seeing a larger allocation to smallcap space in portfolios than ever before, it is no longer a space that is only considered investable by HNIs or large family offices who can afford to risk their capital a little more than the retail investors. This democratisation of small cap is a huge shift in the industry and we will witness capital allocation to this space at a faster speed than we have before. It is safe to say that investors are seeing value investment opportunities in small caps returning back after witnessing a selling cycle," he added. The BSE Smallcap index has already recovered 20% from the lows and on Tuesday closed at 49,143.12. Smallcaps with QoQ cut in retail holding The sharpest cut of 16% in retail shareholding was seen in Embassy Developments and it was followed by MM Forgings and Kamdhenu with 14% and 8% QoQ drop. In 40 other stocks, the cut was between 7% and 1%. Among them are MAS Financial Services, Sundrop Brands, Kitex Garments, Camlin Fine Sciences, Shaily Engineering Plastics, The South Indian Bank, RBL Bank, Restaurant Brands Asia, Suyog Telematics, Aditya Vision, GRM Overseas, Vimta Labs, Coffee Day Enterprises, Aavas Financiers, Ujjivan Small Finance Bank, Thangamayil Jewellery and Prataap Snacks. The other widely tracked smallcap stocks that have seen retail ownership go down sequentially in the January-March quarter include CarTrade Tech, Nazara Technologies, Poonawalla Fincorp, Gujarat State Fertilizers & Chemicals, Anand Rathi Wealth, Bharat Dynamics, Nuvama Wealth Management, Garden Reach Shipbuilders & Engineers, Birlasoft, Cochin Shipyard, and Honasa Consumer. The stake has dipped between 1.4% and 0.15% Also Read: Market volatility hits high beta stocks as 92% scrips fall up to 66% from peaks. These 2 risks loom Status quo stocks Meanwhile, there has been no change in retail holdings in these six stocks viz. Blue Dart Express, Elantas Beck India, Kirloskar Industries, Praj Industries, Rama Steel Tubes, and Uniphos Enterprises. Time to make positional bets? Trump's tariff scare still lingers as the 90-day pause will end in July. The domestic markets have stablised as Foreign Institutional Investors (FIIs) have made a comeback to the domestic market. They have purchased Indian equities for the past five trading sessions, pumping in Rs 17,251 crore. The IMF has revised India's FY26 GDP growth forecast downwards to 6.2% due to trade tensions and US tariffs, with a further reduction to 6.3% projected for FY27. Prior to this, the Reserve Bank of India (RBI) and ratings agency Fitch had cut their estimates on India. In the case of market turmoil or economic slide, the preference could shift to largecap counters. Garg is of the view that the current set-up justifies selective positional bets on smallcaps amid caution. "Valuations have reset meaningfully post-correction, and retail interest has returned. However, this window is temporary and expires in July, leaving room for both opportunity and risk. Smallcaps tend to outperform in early-stage recoveries, and India's macros—cooling inflation, stable policy, rising capex—support a near-term rally," he warned, adding that global trade overhang remains. Gupta of SKG Investment recommends taking positional bets in companies that have a steady order book, strong management and a good track record i.e. those companies that have experienced downtrends in the past. 3 tips to make a move in smallcaps: 1. Garg calls the current situation as a tactical opportunity and not a structural bet. He recommends focusing on domestically driven, low-debt smallcaps with earnings visibility. 2. Garg prefers staying away from sectors like metals and IT in the smallcap space. Metals are too exposed to global pricing cycles and the recent pause on Chinese tariffs could trigger supply distortions, hurting pricing power. On the other hand, smallcap IT is facing demand headwinds due to the US slowdown. The dollar is weakening and there is a real risk to export-linked revenue stability, Invasset PMS analyst said. Auto, real estate, and metals are also 'Avoid' for Gupta. 3. Gupta is cautious about sectors that rely on discretionary spending as consumers become defensive when the economy is slowing. Smallcap stocks related to travel, household goods, hospitality, and consumer durables remain vulnerable, according to him. His top picks include BLS International, Integrated Industries, MOS Utility, Master Trust, OBSC Perfection, Healthcare Global Enterprise, Rama Steel, and Fedder Holdings.
