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Time of India
26-06-2025
- Business
- Time of India
Equity investing not about overnight returns: Puneet Sharma on geopolitical issues and 2025 sector picks
Geopolitical conflicts and market swings can rattle even seasoned investors, so where does that leave retail participants? Puneet Sharma , CEO of Whitespace Alpha , shares insights on what moves the markets, why trying to time them is a trap, and how everyday investors can build a resilient portfolio in 2025. From FMCG tailwinds to ETF-based diversification, here's what you need to know to stay one step ahead. Excerpts: Q. How are Indian equity markets reacting to the current geopolitical situation? Puneet Sharma: Globally, a lot is happening in quick succession—constant news flow, unexpected events—so markets are reacting rapidly. Indian markets, in particular, have responded positively despite recent volatility. Take yesterday, for instance—there was uncertainty when the market opened, and no one really knew how things would unfold. The equity markets are closely tracking global developments. Expectations around corporate earnings get quickly factored into share prices. It's an exciting time for those on the sidelines, but it can be tricky for active investors navigating through the volatility. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 立ち上がれないトラの中身に驚愕、獣医が超音波を見て警察に連絡 Undo Q. What about the global picture? How do you think the Iran-Israel conflict and the US involvement are impacting global equity markets? Puneet Sharma: The most immediate impact is on crude oil prices, which we've seen spike recently. Since much of the world's oil supply flows through the Iran region, any disruption causes risk for shipping routes. That fear is reflected in oil prices. In India, oil marketing companies saw a sharp fall yesterday but bounced back today, most are up around 2.5%. Events like these trigger short-term volatility and impact investor sentiment globally. We've seen this earlier too, when the U.S. announced tariffs and the India-Pakistan conflict escalated, volatility spiked with 2–2.5% swings in the Indian indices. But now, with the ceasefire between Iran and Israel, we expect this turbulence to be short-lived. Markets should stabilize, and the focus will return to economic fundamentals and growth. Live Events Q. While wars are unfortunate, some sectors do benefit during such times. Which sectors could outperform while this geopolitical chaos plays out? Puneet Sharma: It's a tough call. Initially, we saw a broad sell-off, triggered partly by FIIs pulling out money, which also led to INR depreciation. IT, for example, felt the heat due to forex impact on margins. However, as stability returns, IT could see a recovery. Oil and energy remain directly impacted. Auto is another sector to watch, fuel price hikes haven't yet hit retail prices hard, but if crude crosses $75 a barrel, it could eventually dent demand, especially for auto companies. Still, this might be temporary. In the long term, this episode might just be a footnote. So, I'd advise investors not to try timing the market. If you've built a long-term, curated portfolio, stay invested and trust the process. Q. What are some 2025 themes to watch? Based on domestic factors, which sectors or types of funds should retail investors consider? Puneet Sharma: Monsoons are expected to be average or slightly better, which bodes well for rural demand. Historically, when rural incomes rise, FMCG benefits significantly, so I'd bet on FMCG. The government's tax relief for those earning up to ₹12 lakh a year also increases disposable income. Combine that with monsoon-driven demand, and you have a strong case for both FMCG and entry-level auto, especially two-wheelers and budget cars. Automobile ancillaries should benefit too. Another theme is insurance—health and life insurance demand is picking up as financial awareness grows. Q. For someone entering the markets in 2025, how can they build an 'all-weather' portfolio that withstands both geopolitical and domestic turbulence? Puneet Sharma: Investors today have access to highly diversified options. For an all-weather portfolio, I recommend starting with ETFs like Nifty 50 or BSE 500. These provide broad exposure across sectors and include large-, mid, and small-cap stocks. BSE 500 even includes emerging companies that could turn into multibaggers. ETFs are a great way to gain diversification without stock-picking. But remember, no portfolio is completely immune to market corrections. There will be dips like we saw in October 2024 or March 2025. The key is to stay invested through those phases. Equity investing is not about overnight returns; it's about wealth creation over time. Patience is everything. Q. Would you recommend a specific asset allocation ratio for medium to high-risk investors right now? Puneet Sharma: At Whitespace Alpha, we're focused on long-term capital appreciation via equities, so our fund is 100% equity. But I believe a 60:40 split between equity and debt is healthy for most medium to high-risk investors. It provides some cushion while allowing meaningful equity participation. For more aggressive investors, a higher equity allocation makes sense. Q. What should investors do right now? Should they rebalance or wait it out? Puneet Sharma: My advice is to stay the course. If you've done your research, believe in the companies you're invested in, and understand their business fundamentals, don't react to short-term events. Timing the market rarely works in the long term. Many studies confirm that even missing just a few good days can significantly impact your overall returns. Rather than trying to exit at the top and re-enter at the bottom—which is often just guesswork—stick with your long-term philosophy. If something fundamentally changes about a company or sector, by all means, reassess. But don't make investment decisions solely based on short-term events or noise.
Economic Times
26-06-2025
- Business
- Economic Times
Equity investing not about overnight returns: Puneet Sharma on geopolitical issues and 2025 sector picks
Geopolitical conflicts and market swings can rattle even seasoned investors, so where does that leave retail participants? Puneet Sharma, CEO of Whitespace Alpha, shares insights on what moves the markets, why trying to time them is a trap, and how everyday investors can build a resilient portfolio in 2025. From FMCG tailwinds to ETF-based diversification, here's what you need to know to stay one step ahead. Excerpts: ADVERTISEMENT Q. How are Indian equity markets reacting to the current geopolitical situation?Puneet Sharma: Globally, a lot is happening in quick succession—constant news flow, unexpected events—so markets are reacting rapidly. Indian markets, in particular, have responded positively despite recent volatility. Take yesterday, for instance—there was uncertainty when the market opened, and no one really knew how things would unfold. The equity markets are closely tracking global developments. Expectations around corporate earnings get quickly factored into share prices. It's an exciting time for those on the sidelines, but it can be tricky for active investors navigating through the volatility. Q. What about the global picture? How do you think the Iran-Israel conflict and the US involvement are impacting global equity markets? Puneet Sharma: The most immediate impact is on crude oil prices, which we've seen spike recently. Since much of the world's oil supply flows through the Iran region, any disruption causes risk for shipping routes. That fear is reflected in oil prices. In India, oil marketing companies saw a sharp fall yesterday but bounced back today, most are up around 2.5%. Events like these trigger short-term volatility and impact investor sentiment globally. We've seen this earlier too, when the U.S. announced tariffs and the India-Pakistan conflict escalated, volatility spiked with 2–2.5% swings in the Indian indices. But now, with the ceasefire between Iran and Israel, we expect this turbulence to be short-lived. Markets should stabilize, and the focus will return to economic fundamentals and growth. Q. While wars are unfortunate, some sectors do benefit during such times. Which sectors could outperform while this geopolitical chaos plays out? Puneet Sharma: It's a tough call. Initially, we saw a broad sell-off, triggered partly by FIIs pulling out money, which also led to INR depreciation. IT, for example, felt the heat due to forex impact on margins. However, as stability returns, IT could see a recovery. ADVERTISEMENT Oil and energy remain directly impacted. Auto is another sector to watch, fuel price hikes haven't yet hit retail prices hard, but if crude crosses $75 a barrel, it could eventually dent demand, especially for auto companies. Still, this might be the long term, this episode might just be a footnote. So, I'd advise investors not to try timing the market. If you've built a long-term, curated portfolio, stay invested and trust the process. ADVERTISEMENT Q. What are some 2025 themes to watch? Based on domestic factors, which sectors or types of funds should retail investors consider? Puneet Sharma: Monsoons are expected to be average or slightly better, which bodes well for rural demand. Historically, when rural incomes rise, FMCG benefits significantly, so I'd bet on FMCG. ADVERTISEMENT The government's tax relief for those earning up to ₹12 lakh a year also increases disposable income. Combine that with monsoon-driven demand, and you have a strong case for both FMCG and entry-level auto, especially two-wheelers and budget ancillaries should benefit too. Another theme is insurance—health and life insurance demand is picking up as financial awareness grows. Q. For someone entering the markets in 2025, how can they build an 'all-weather' portfolio that withstands both geopolitical and domestic turbulence? ADVERTISEMENT Puneet Sharma: Investors today have access to highly diversified options. For an all-weather portfolio, I recommend starting with ETFs like Nifty 50 or BSE 500. These provide broad exposure across sectors and include large-, mid, and small-cap 500 even includes emerging companies that could turn into multibaggers. ETFs are a great way to gain diversification without stock-picking. But remember, no portfolio is completely immune to market corrections. There will be dips like we saw in October 2024 or March 2025. The key is to stay invested through those phases. Equity investing is not about overnight returns; it's about wealth creation over time. Patience is everything. Q. Would you recommend a specific asset allocation ratio for medium to high-risk investors right now? Puneet Sharma: At Whitespace Alpha, we're focused on long-term capital appreciation via equities, so our fund is 100% equity. But I believe a 60:40 split between equity and debt is healthy for most medium to high-risk investors. It provides some cushion while allowing meaningful equity more aggressive investors, a higher equity allocation makes sense. Q. What should investors do right now? Should they rebalance or wait it out? Puneet Sharma: My advice is to stay the course. If you've done your research, believe in the companies you're invested in, and understand their business fundamentals, don't react to short-term the market rarely works in the long term. Many studies confirm that even missing just a few good days can significantly impact your overall returns. Rather than trying to exit at the top and re-enter at the bottom—which is often just guesswork—stick with your long-term something fundamentally changes about a company or sector, by all means, reassess. But don't make investment decisions solely based on short-term events or noise. Disclaimer: Recommendations, suggestions, views and opinions given by the experts/brokerages do not represent the views of Economic Times. (You can now subscribe to our ETMarkets WhatsApp channel)
Time of India
17-06-2025
- Business
- Time of India
ETMarkets Smart Talk - Missed the 2025 Rally? Don't chase—ease in with SIPs & structured debt: Puneet Sharma
In this edition of ETMarkets Smart Talk, Puneet Sharma , CEO & Fund Manager at Whitespace Alpha, offers a grounded perspective for investors navigating the post-rally landscape of 2025. While many are grappling with a fear of missing out ( FOMO ) after sitting on the sidelines during the market 's early surge, Sharma urges caution over emotion. Instead of chasing momentum, he advocates a disciplined, phased approach—leveraging SIPs and structured debt strategies to steadily build exposure without taking on unnecessary timing risks. Sharma also shares his views on market resilience, sectoral opportunities, and why domestic flows are now the backbone of Indian equities . Q) How do you see markets in the medium-to-long term? A) Honestly, the volatility in June doesn't worry me too much. It feels more like the market catching its breath after a fairly strong first half. If you look under the hood, India's still a domestic-demand-led story, and that engine's running steady. Other emerging markets have had a good run — partly thanks to currency moves and commodities — but we've had a more balanced, fundamentals-led path. From a medium- to long-term perspective, I'm still constructive. We're in the middle of an earnings cycle that's holding up well, domestic flows are steady, and with policy continuity now behind us, I think the market has more depth than it's being credited for. Short-term underperformance? It happens. But the long-term direction hasn't changed. Q) What's your view on the June MPC rate cut and what do you expect ahead? A) To be frank, the 50 bps cut was a bold but well-calibrated move. It sends a clear signal that the MPC is leaning into growth now that inflation is more under control. You could say they pre-empted global easing — which shows a certain confidence in our macro stability. That said, I don't think we're in for a deep rate-cutting cycle. Maybe one more cut, but after that, it's likely to be a wait-and-watch. If food inflation picks up due to patchy monsoons or crude spikes, the RBI will need to stay flexible. So, I'd say: calibrated, not aggressive — that's the path I see. Q) Which themes look attractive in this environment? A) What I find really interesting is how the old labels — like 'defensive' and 'cyclical' — are being redefined right now. The way I see it, three themes stand out: First, manufacturing exports — especially sectors like defense, capital goods, and engineering they're clear beneficiaries of the China+1 shift and global realignment. Second, rate-sensitive domestic sectors. Q) Will a normal monsoon support consumption and autos? A) Yes, and quite significantly — especially in rural-focused segments. A good monsoon tends to lift agri incomes and unlocks discretionary spending. Two-wheelers, tractors, even value-end appliances and staples — all stand to gain. We've already seen rural demand lagging a bit, so this could be a much-needed catalyst. That said, the devil is in the distribution — how the rain is spread and how it supports the kharif season will be key. So, cautiously optimistic, I'd say. Q) What's your take on flows — FIIs returning, DIIs staying strong? A) It's been good to see FIIs turning net positive again especially with political uncertainty behind us and rate expectations easing globally. But we have to acknowledge: FII flows are fluid. They'll react to global yields, oil prices, and the dollar. What gives me more confidence is the strength and resilience of domestic flows SIPs, long-only DIIs, pensions they're now the bedrock of this market. Unless there's a major global shock, I don't see a sharp reversal. India is no longer just a high-beta EM play we're increasingly being viewed as a strategic allocation. Q) Any sectors or themes to avoid right now? A) To be honest, we're a little cautious on commodities and global cyclicals, especially those tied to China's industrial cycle. Visibility is low and the risk-reward just doesn't look compelling. Also, some parts of the tech IPO pack still feel a bit ahead of themselves as valuations haven't quite aligned with profitability yet. The market's in a mood where it's rewarding stability and delivery. So we're avoiding names that are still built more on promise than actual performance. Q) Block deals and promoter selling — red flag or business as usual? A) I think we have to view it in context. Yes, there's been an uptick in block deals and some promoter selling, but in most cases, it's just portfolio rebalancing or estate planning after strong wealth creation. It becomes a concern only if it's paired with weak results or a change in governance tone and we haven't really seen that. In fact, most of these blocks are being picked up by long-term institutions, which speaks to the underlying confidence in those businesses. So right now, I'd say it's business as usual. Q) Small & midcaps vs large caps - where do you stand now? A) Valuations in the small and midcap space are definitely rich in parts. There's quality out there, no doubt, but you have to be selective. We're avoiding names where momentum has pushed price far ahead of fundamentals. Focused bets on companies with clean balance sheets and earnings visibility still make sense. On the other hand, large caps, especially in banks, capital goods, and industrials, are offering better relative value right now. A balanced allocation makes sense in this phase with a little more tilt toward quality large caps. Q) What's your advice for investors feeling FOMO after sitting out the early 2025 rally? A) To be honest, this happens every cycle. And the worst thing you can do is react emotionally. If you've missed the first leg of the rally, don't try to time the top or bottom staggered buying is your best friend here. SIPs, tranches, even simple discipline in allocation can help ease in without taking on timing risk. For those still uncertain about equity timing, allocating a portion to structured debt strategies can be a smart interim approach. It allows your capital to work earning steady, low-volatility returns while you gradually build exposure to equities with greater confidence.
Economic Times
13-05-2025
- Business
- Economic Times
FII return with Rs 46K cr buying spree; likely prefer largecaps vs broader market stocks. Here's why
Foreign institutional investors (FIIs) infused nearly Rs 46,400 crore into Indian equities since April 15, extending their shopping spree to 17 out of the last 18 sessions, with a significant portion of these flows likely directed towards large-cap stocks. This trend highlights a growing preference among overseas institutions for quality and stability amid prevailing global uncertainties. ADVERTISEMENT With India-Pakistan ceasefire and a tariff truce between the US and China, where both countries have agreed to significantly ease their tit-for-tat tariffs for a 90-day period, a calm is expected to return in global markets. On Monday, both Indian and US markets ended with strong gains. FIIs broke their 16-session buying streak on Friday, offloading shares worth Rs 3,799 crore as tensions between India and Pakistan flared up. But on Saturday, both countries agreed to a ceasefire. Puneet Sharma, CEO and Fund Manager at Whitespace Alpha, said that he is observing a clear re-risking by FIIs in May 2025, with initial capital allocations favouring large-cap names, particularly in sectors like private banking, capital goods, and high-beta infrastructure plays.'We see the current phase of FII flows as quality-led and conviction-driven and not a blanket chase of momentum. Largecaps remain the primary beneficiaries, with midcaps following through in pockets where the growth narrative is backed by numbers,' Sharma his view, a targeted participation in midcaps is being seen and only where there's a strong earnings delta or sectoral tailwind, like in defence, renewables, and manufacturing clusters with PLI exposure, stand out. ADVERTISEMENT Corroborating this view, Geojit Investments' VK Vijayakumar said that there is a big shift in market preference in favour of largecaps, away from overvalued segments of mid and smallcaps is significant. FIIs are mainly buying largecaps, and this trend can continue, he opined."The ceasefire between India and Pakistan has paved the way for a sharp rally in the market. The prime mover of the rally will be the FII buying, which has been sustained for sixteen continuous days, except last Friday when the conflict escalated. Domestic macros like expectations of high GDP growth and revival of earnings growth in FY26 and declining inflation and interest rates augur well for the resumption of a rally in the market,' Vijayakumar said. ADVERTISEMENT The trend reversed following a three-month pause announced by Donald Trump. A fortnightly data on FII action by NSDL for the period between April 16 and 31, shows that the highest FII inflows went to the financial services sector at Rs 17,585 crore. Sectors that followed were telecommunication (Rs 3,413 crore), healthcare (Rs 2,138 crore), power (Rs 1,627 crore) and capital goods (Rs 1,613 crore). FIIs have also bought shares in the auto & auto components sector, metals & mining, chemicals, construction and realty, among others. ADVERTISEMENT In Vijayakumar's view, FIIs are preferring stocks like ICICI Bank, HDFC Bank, Bajaj Finance, Reliance Industries (RIL), Larsen & Toubro (L&T), Bharti Airtel, Ultratech, Mahindra & Mahindra (M&M) and Eicher Motors, and they are likely to lead the rally. At the peak of FII selling between January and March, when foreign investors sold shares worth Rs 116,574 crore, there were 11 Nifty 50 stocks in which the FIIs added stakes. These stocks include Hindalco Industries, ICICI Bank, IndusInd Bank, JSW Steel, Kotak Mahindra Bank, Bajaj Finance, Bajaj Finserv, Bharat Electronics, Bharti Airtel, Shriram Finance and Wipro. ADVERTISEMENT A report by Motilal Oswal Financial Services (MOFSL) highlights the shift in the domestic equity ownership of FIIs. The FIIs held 18.8% as of March 2025 versus 22.8% in March 2015. At the same time, domestic institutional investors raised their stake to an all-time high of 19.2% in March 2025 versus 10.8% in March a proportion of the free float of Nifty-500, FII ownership decreased 190 bps YoY and 30 bps QoQ to 37.3%, while DII ownership increased 220 bps YoY and 110 bps QoQ to 38%.Sharma of Whitespace attributes this shift to the rising domestic participation, expansion of market breadth, the impact of Covid-19, a surge in global interest rates to multi-decade highs, and valuation expansion in the domestic markets. Markets have displayed strong stability for the past month after Trump deferred reciprocal tariffs for three months. Over the past month, the Nifty has delivered a return of 9.2%, closely tracking the Nifty Midcap 100's gain of 9.7% and outperforming the Nifty Smallcap, which rose 6.8%. On a 1-year basis, the headline index has delivered 13% returns, higher than 12% by Nifty Midcap 100 and 4% by Nifty Smallcap 100. Sharma of Whitespace Alpha said that when global volatility subsides and the INR stabilises, institutions tend to first rotate into scalable, liquid opportunities. 'From our market-neutral framework, this has also resulted in noticeable shifts in index futures basis, signalling renewed institutional confidence. In contrast, smallcaps remain more of a retail and domestic mutual fund story at this point, with FIIs staying cautious due to elevated valuations and limited liquidity headroom,' he said midcap IT and digital stocks are other segments to watch. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel)
