Market forecasts Caution as Fiis, worldwide risks keep investors on Edge: Sunil Subramaniam

The market movement This last week can be explained quite clearly if you look at the streams. Mark expert Sunil Subramaniam In an interview with ET, now said that domestic institutional investors (Diis) consistent buyers have remained, even during volatility. The pressure comes entirely from foreign institutional investors (FIIs), whose sales this week was intensified after briefly relaxing after last week.

“I would again point it out to only one factor – the Trump factor, the uncertainty he has caused and not only in terms of today’s pharmaceutical announcement, I think he also met Pakistani Prime Minister,” Subramaniam said.

He noted that about 40% of the FII stream to India comes from the US. “So what happens to America has clearly a great importance about the Fii flows to the country and it is that any thing and the announcement of the pharmaceutical did not help today, but even otherwise I think that only if there is an optimism around the trade agreement that you will probably see a reversal, otherwise the degree of correction that has happened.

The irony is that the actual impact of these announcements on Indian companies is limited. For example, the top five IT companies only took about 13,000 H-1B-VISA last year, which is a small number compared to their scale. Similarly, most pharmaceutical exports are generic medicines that were not immediately aimed. Yet markets reacted strongly because FIIs are worried about the wider direction that Trump could take. Will H-1B restrictions become a recurring problem every year? Can generic medicines be included in future policy changes? This persistent uncertainty stimulates the sale, regardless of the immediate basic principles.

“So I think the Trump premium for shares in India has made up and of course has an impact that has not helped the rupid is weakened because it hurts and the news about the European front is that when Europe and NATO come to war against Russia, then Russia will have a lot of natural gas to Europe, it is all to say.

Next week both FIIs and the rupid will probably remain under pressure. Friday’s news, in particular the announcement of the pharmaceutical announcement and constant uncertainty surrounding H-1B-VISA, hesitates investors, because there is no clear path for planning during the weekend. The weakness of the rupid, Subramaniam said, is partly due to strong American GDP data, which has strengthened the dollar, while global rough price risks and geopolitical tensions, in particular the military movements of Russia in Europe, add a challenge for the market for the market. “So, for the coming week, I don’t think there is a clear direction that you will get a positive direction, because unless I see Mr. Trump or someone in the mood to say anything that Mr Piyush Goyal’s visit to the US is a more important,” he said. October is probably a crossover period for Fiis. They tend to assess a year of longer valuations during this period, which can facilitate sales pressure, provided that there is positive news about trade agreements, H-1B-VISA or pharmaceutical regulations. Until that time, markets remain very news driven and reactive on global and US -focused developments.

For a shorter horizon of about six months, Subramaniam said that he would concentrate on consumer -oriented sectors such as consumer -discretionary, cars and sustainable consumers. With Diwali and the Christmas season that is expanding, these segments will probably see robust sales. The positive seasonal momentum will be reflected in top line growth, and even if companies offer discounts, the overall performance should support stability. Consumer discretionary shares can experience the least resistance to correction during this period, making them suitable for tactical positioning.

For a longer -term perspective of 12 to 15 months, it is a suitable time to start collecting shares with domestic targeted shares while diversifying in the domestic space. The continuous consumption tree, powered by seasonal demand and GST cuts, is likely to improve capacity use in consumer companies, which sets the stage for private Capex.

“Real estate is not something that you buy at festival time, but you buy something that you give as a car or a fridge or something similar or something similar. So the impact of the GST -cut that is on cement and other input costs, plus the banks emi -cuts will mean that real estate will then only pay for their first home. High -end is because that is what has been sold.

In addition, industrial capital goods, steel and cement should benefit as the private capex increases, in particular through SMEs and MSMEs, where PSU banks will play a critical credit role. With the interest rates in the reach of 12-14%, it is expected that both the growth of the loan and the margins will be strong, he said.

((Indemnification: Recommendations, suggestions, views and opinions of experts are their own. These do not represent the views of economic times)