Latest news with #Magnificent-7
Time of India
26-04-2025
- Business
- Time of India
Geopolitical tensions and trade war fears weigh on Indian markets: Ajay Bagga
Ajay Bagga, Market Expert, says you can expect that over the next two weeks there will be a geopolitical event that is what is the overhang on the Indian markets , otherwise based on the trade wars de-escalating and the risk sentiment improving, we have seen Asian markets doing much better, we have seen European markets recover quite well despite slowing growth in Europe and still no visibility of Europe signing a deal with the US and US markets, of course, we have seen the previous three days a sharp recovery even in the big tech, the Magnificent-7 have rallied upward. ET Now: We need to make sense of the market impact of all the geopolitical tension that we are seeing brewing between us and Pakistan, it is expected to escalate going ahead as well. We have held the Indus Water Treaty in abeyance. Tell us the impact of all of this in terms of geopolitical stress and also, how this would impact our markets, what can we expect heading into Monday given we still have a couple of days before the next trading session and the kind of news flow we can expect to hear over the weekend? by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Play War Thunder now for free War Thunder Play Now Undo Ajay Bagga: Yes, after that opening segment of yours, I wanted to say have a happy weekend and move off because you have covered everything quite substantively. Looking at the geopolitical tension, we have to see what happened during the Uri strike and the Balakot strike. So, between the terror strike and the Indian retaliation, the time was about 10 to 15 days, 10 for Uri and 15 days for Balakot. So, you can expect that over the next two weeks there will be a geopolitical event that is what is the overhang on the Indian markets, otherwise based on the trade wars de-escalating and the risk sentiment improving, we have seen Asian markets doing much better, we have seen European markets recover quite well despite slowing growth in Europe and still no visibility of Europe signing a deal with the US and US markets, of course, we have seen the previous three days a sharp recovery even in the big tech, the Magnificent-7 have rallied upward. Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track default , selected Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. So, overall global risk-on has improved slightly and we are seeing hopes of some kind of a trade deal. Still the China one, there are two narratives, there is a Chinese narrative which is calling Trump's statement a fake news, that they are saying nobody from our side has engaged with the US counterparts, Trump has said we are in discussions with the Chinese and we talked with them even this week. So, one does not know where exactly the reality is. But both sides hopefully will strike some kind of a deal or at least deescalate from the present tariff level. So, India all the tick marks are there for continued recovery in the Indian markets. We have outperformed in March and April, expectation was that that would continue; however, the geopolitical overhang and it is anybody's guess when in the next 10 to 15 days you could see some geopolitical event on the Indian subcontinent. ET Now: Want to get your view on our GDP growth outlook. The RBI pegs our outlook for this year at 6.5%. You have IMF that has come in and slashed it to 6.2, World Bank to 6.3. How much if at all do you agree with these growth estimates and do you believe factoring in everything that we are seeing in terms of geopolitical tensions right now, what do you think is our growth trajectory for this year going ahead? Ajay Bagga: I would go with the RBI number, but definitely there is an impact of the trade war, so that is still a lot of it is to be closed out. Our bilateral trade agreement will probably happen by July end to September some time we should be able to sign that. Even this 10% tariff will have some drag on the Indian economy. Overall, sentiment around the world is on a stop basis and the IT order flow has reduced a lot, the kind of moment that we see that is lacking as far as the management guidances have come. So, I would go with the RBI number right now, but it will trend lower as we go towards the second half of the year. Live Events The good news is the rate cut transmission will happen that will lend a leg-up to the economy and we are expecting two more rate cuts still in this calendar year, so that is going to help us. Overall, the domestic economy should be okay. It is looking like a normal to above normal monsoon, but as you mentioned the geopolitical risk with Pakistan stays quite elevated and it will depend a lot on whether it is a one-off event or it becomes a wider conflagration, if it becomes wider, then there could be an impact on the GDP. But I would say we are probably looking at something in the range of 6.3 to 6.5 as of now. ET Now: Want to get your sense on the market impact if any of this in terms of how you are viewing the defence group of stocks now. Do you believe that this could have any impact on the defence group of stocks given that now India would ideally look to strengthen its arsenal of the kind of artillery, the weaponry, that we have, what is your outlook on the defence pack on the back of everything that is happening? Ajay Bagga: Very true. Overall global geopolitical risk is elevated and then we have this issue of this terrorist massacre in Kashmir. So, both will lead to higher defence outlays and ratcheting up of immediate defence production, so defence stocks will do well in this kind of a scenario and we are expecting India to spend more to increase its defence preparedness. So, defence stocks are a good sector to look at. Around June we saw the correction setting in on the base of valuations being quite elevated, then we saw a good correction and now again, they are finding favour over the last three to four weeks that should continue and our defence sector should outperform the market. ET Now: If you could just help me understand how we are positioned now to the world in terms of foreign ownership coming into India because after the correction that we have had, we had a big pull out coming in from FIIs, we have just seen some flows coming in and once again this volatility that we are seeing in the market, where do you think we are placed in terms of how we are looked at, do you believe that this correction is going to provide an opportunity to FIIs to see us as a buy on dips market or do you believe that we are still very highly valued for the FIIs to make their comeback? Ajay Bagga: We are looking quite attractive. We are reasonably valued is what I would say and if we look at where the FIIs are really coming in, they have been going more into the value based sectors and they have also gone down the capitalisation chain. So, quite surprisingly the FII holdings have increased in a majority of the Nifty midcap and Nifty smallcap index, more than 50% of those stocks have seen FII holdings increase over the last three months. So, clearly, we are finding favour, we are seen as a resilient market, but we are not fully insulated in case there is a global recession as we saw in 2008, we held our own for some time and then we were very much a part of the falling dominoes globally. So, right now, we are looked at as an attractive market. The issue with Pakistan has made the environment partly cloudy with more or less a guarantee of some kind of rain. Now, how widespread is that rain becomes an issue and given that there could be some hold back from FIIs wanting to come into the country, they would like to see how things work out and then again…, but the fundamentals of the Indian market remain quite good. Valuation-wise we were never cheap, we were at a premium, but now we are quite reasonable given the outlook and given what we offer in a very volatile world.
Time of India
22-04-2025
- Business
- Time of India
Not the time for speculative bets; stick with what drives the economy: Anurag Singh
"So, it is like exit America trade where yields drop, equities drop, and the dollar drops. So, that is how I see. I do not know to what extent this craziness would go but, obviously the president sees that if the market is not responding the way he would have thought the market would respond, he would have to take his energies out somewhere and then that comes out on the big loser guy asking the resignation of the loser guy. So, it is funny in a sense, but it is not funny really," says Anurag Singh , Managing Partner, Ansid Capital . It has not been a great morning or afternoon when you talk about the US markets, a sharp slide coming in, especially the Magnificent-7 also saw a sharp knock. How should one actually read into this and the developments day in and day out now Trump is actually targeting Jerome Powell once again? Anurag Singh: I always used to think that India has this art of inflicting self-inflicted wounds along the way, but look here we are, US can do better than that and this is where it is. This is completely self-inflicted. This is totally unnecessary and whatever be the end goal that Trump had in mind that is not happening because even at an elementary level he thought that maybe higher tariffs would result in lower yields and strong dollar. It happened for a bit, but then it did not. So, ultimately exactly the reverse is happening and that is confusing markets, that is confusing everyone. But it seems to be it is very apparent now that people are just…, some capital on the margins is leaving America. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Prince William & Kate Met Princess Diana's Secret Daughter. Plays Star Undo So, it is like exit America trade where yields drop, equities drop, and the dollar drops. So, that is how I see. I do not know to what extent this craziness would go but, obviously the president sees that if the market is not responding the way he would have thought the market would respond, he would have to take his energies out somewhere and then that comes out on the big loser guy asking the resignation of the loser guy. So, it is funny in a sense, but it is not funny really. What is exactly happening when you talk about the tariffs because everyone is waiting that there will be some deal struck or no. Now you have talks that Vietnam deal may be out soon and a lot of companies that may actually end up benefiting from that. So, how should one actually read into all of these developments because it is very difficult to gauge the market right now? While yes, US markets are down and out, back home we have managed to actually scale a record high level on Nifty Bank? Anurag Singh: So, if you look at it today, except for China everybody has 10% tariff. So, basically, whatever the damage was inflicted on April the 2nd, April 3rd that has been kind of have a 90-day reprieve. The point is market does not trust. If the president is just all and out there to destroy American companies and American markets, then how can a market trust what multiple to give to the profits and who knows what will happen, what will come out of these deals. So, the entire business community, the economic engine of US is in kind of a stalemate in terms of decision- making. Live Events Nobody can decide anything on this. How does a company decide how much to produce, where to import from, how to hire. So, the entire machinery is on a standstill and that is the biggest damage that we see right now and it will persist until we have very clear ramp down from this tariff, until somebody lowers down this this ratchet and takes an offramp from here. I mean let us see, but at least the markets know that the bond market has put a bottom on at least where the president comes in and kind of tries to save the markets. So, at least the bond yields the moment it crosses 4.4, 4.5, I think that becomes a worry sign. So, at least there is some comfort there. But yes, in terms of US market, I still believe that US is actually the place to be. People are talking about money moving to Europe that is a dead end, Europe is not going to perform, you have got to decide where your money is going to be. Europe has not performed for the past 15 years. So, my firm belief is money can go to China, money can go to India, but it certainly is not going to go to Europe. So, eventually US is going to prevail, on the margins I am sure India will do well and so will China. So, I mean India is likely to be a beneficiary although on the margins of the risk off manufacturing coming out of China. So, there will be some benefit, it will not be substantial, but it will be there. Aside of that, yes, India is on domestic engine, domestic economy is doing good, I mean it is not too bad relatively to the world. So, I am quite positive India will do well along with China. But sectorally help us understand that where is the FIIs interest coming in when it comes to the Indian markets because yes, we know that their major exposure has been in the financial space and that space is definitely rocking, but other than that help us understand which sectors are looking good at this point in time and where are the FIIs trying to look at this point in time. Anurag Singh: So, there is a long-term view on your question, there is a short-term view. Whatever the flow is coming to India, usually the trend is if the dollar weakens, it is at 98. I mean, it was 110, believe it or not like a month and a half back. So, whenever dollar weakens, money comes to emerging market. But this time dollar is weakening for a wrong reason and my sense is Chinese are dumping and even the Japanese are dumping the dollar for the time being on the margins, so that is one reason. You do not see a huge gush of money coming to emerging market, so that is the immediate short-term reason. Long-term, the trend is that Indian market, I strongly believe you can keep counting on the margins, but I am of the school of thought that the peak of FIIs holding in India happened in 12-13 which was like 22%, now it is back at 15%, it might range, go down to 12%, eventually the trend will continue. If there is such a long-term persistent trend, there is no reason that should change overnight. But domestic flow is huge. So, something has to balance out. So, that is kind of my quick take on FIIs overall level of holdings in India. In terms of what to buy, I think we had a great party for last five years on all the kind of non-performers in the economy which is PSUs and manufacturing and what not. I think we need to come back to the core of technology, banking, and FMCG because next three years in Indian market are not going to be rocking returns, they are going to be like 5, 6, 7, 8, 9, 10% returns in the market overall and so this is the time where you absorb the returns you have made for the past five years and build on that. So, in that sense you always go back to those stable sectors which drive the economy which is FMCG, banking, technology, and a bit of healthcare of course which is a rising sector and it is not a time to get into any of these fancy sectors which people tried for the last three-four years.
