{"id":344236,"date":"2025-12-13T00:16:16","date_gmt":"2025-12-13T00:16:16","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/344236\/"},"modified":"2025-12-13T00:16:16","modified_gmt":"2025-12-13T00:16:16","slug":"macro-tailwinds-currency-concerns-and-sector-rotation-ashish-gupta-maps-out-the-road-ahead","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/344236\/","title":{"rendered":"Macro tailwinds, currency concerns and sector rotation: Ashish Gupta maps out the road ahead"},"content":{"rendered":"

In a shifting global macro environment, India\u2019s markets are navigating a mix of optimism and caution. With a potential trade deal<\/a> on the horizon and the US Federal Reserve<\/a>\u2019s recent 25-basis-point rate cut injecting fresh momentum into global liquidity<\/a>, investors are evaluating what lies ahead for Asian markets, particularly India. The conversation has increasingly centred on how a large liquidity push\u2014nearly $40 billion\u2014could shape capital flows and market behaviour in the coming months.<\/p>\n

Ashish Gupta<\/a>, CIO, Axis Mutual Fund in an interview to ET Now highlighted that India\u2019s macro backdrop remains constructive, driven largely by sustained GDP growth. This strength has begun to reflect in both market earnings and forward estimates, keeping investor sentiment buoyant. However, he flagged a key shift: \u201cThe challenges have been\u2026 concerns about the trade deals. But equally important is what is happening on the currency market<\/a>.\u201d Gupta noted widening pressures on the current account and sluggish portfolio flows, coupled with no meaningful pickup in FDI\u2014a significant contrast to the nearly \u201cbulletproof\u201d macro environment India enjoyed six months ago. While earnings momentum is strong, the currency has emerged as a fresh point of vulnerability. A favourable trade deal, he added, could spur FDI, bolster exports and ease currency concerns.<\/p>\n

On the earnings front, Gupta expects a steady recovery. \u201cFY26 now we are looking at 8% to 9% growth for market earnings, FY27 we see it is picking up to about 16 odd percent.\u201d After nearly five quarters of downward revisions, this is the first time the market has avoided major earnings downgrades, signalling the start of a reversal. He pointed out that forecasts for FY27 are broadly optimistic across sectors\u2014from automobiles and cement to financials\u2014suggesting the risk to current estimates remains low due to the wide-based nature of expected growth.<\/p>\n

When asked where the revival will be most visible, Gupta said, \u201cEarnings acceleration is visible across sectors.\u201d Banks and NBFCs are seeing gains from improved credit growth and stabilising margins. Automobiles are witnessing a broad recovery\u2014from two-wheelers to early signs of a commercial vehicle upcycle. Consumer-oriented segments and discretionary categories are strengthening, while internet and fintech names offer favourable risk-reward dynamics as sentiment stabilises. However, IT remains the outlier: despite currency-related positives, Gupta does not see meaningful upgrades ahead, with constant currency revenue growth still lacking momentum.<\/p>\n

Sector rotation has been a defining theme over the past year, and Gupta outlined where he sees value emerging now. \u201cWe are positioned on the automobile sector, we are positioned in financial sector. One place we have increased weight is really on the consumption side and consumer discretionary in particular.\u201d He added that EMS\u2014after a sharp correction\u2014is now offering more attractive entry points given strong structural growth potential. Power and defence continue to remain preferred themes despite recent volatility.
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The recent bounce in IT, he explained, is a mix of rupee weakness and the sector\u2019s defensive profile, which has drawn investors back amid broader corrections in mid- and small-caps. Healthcare, too, has benefited from its stability characteristics.
On commodities, Gupta struck a more nuanced tone. \u201cMetals and commodities more broadly are not moving in a pack,\u201d he observed. With contrasting trends between ferrous and non-ferrous metals, the sector requires careful selection rather than blanket allocation. He pointed out that while global commodities have broadly stabilised, oil continues to soften. For contrarian investors, oil may emerge as an unexpected opportunity despite weak near-term fundamentals. Within metals, Gupta\u2019s preference remains firmly tilted towards non-ferrous segments at this stage. As markets head into a period shaped by trade negotiations, shifting currency dynamics and evolving global liquidity, Gupta\u2019s outlook suggests a blend of cautious optimism. The broad-based earnings recovery<\/a> and sector-specific opportunities present a constructive setup\u2014so long as the macro cracks, particularly on the currency front, are addressed through stronger external flows and favourable trade outcomes.<\/p>\n","protected":false},"excerpt":{"rendered":"In a shifting global macro environment, India\u2019s markets are navigating a mix of optimism and caution. With a…\n","protected":false},"author":2,"featured_media":344237,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[190578,64,63,99,190580,105377,164,190579,70939,16522,21097],"class_list":{"0":"post-344236","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-ashish-gupta","9":"tag-au","10":"tag-australia","11":"tag-business","12":"tag-currency-market","13":"tag-earnings-recovery","14":"tag-economy","15":"tag-global-liquidity","16":"tag-india-markets","17":"tag-trade-deal","18":"tag-us-federal-reserve"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/344236","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=344236"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/344236\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/344237"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=344236"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=344236"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=344236"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}