India is increasingly seen as a stable core amidst global uncertainties, as per Quant Mutual Fund’s latest report. Recent military actions by the US and Israel against Iran led to a global equities correction, impacting indices like S&P 500, Nifty 50, Nikkei 225, and KOSPI. The VIX Index, a fear gauge, spiked over 75% earlier in the month, reflecting investor uncertainty.
Despite global challenges, Quant Mutual Fund views stress in domestic markets as a potential turning point rather than a deep-rooted issue. The fund house noted signs of “capitulation” in Indian equities, hinting that the worst correction phase might have passed. It suggests that the increased volatility is a natural part of the market adjustment process, not a dysfunction.
Maintaining a positive outlook on India, Quant Mutual Fund highlighted the country’s nominal GDP growth outpacing China’s, reinforcing its appeal as a global investment hub. The fund anticipates an improvement in the earnings cycle in the upcoming quarters, supported by ongoing reforms and macroeconomic stability. Reflecting this optimism, the fund has raised its equity deployment, capitalizing on attractive valuations post higher cash levels in the previous month.
The fund’s portfolio is primarily focused on large-cap stocks, with selective additions in mid- and small-cap segments. It remains bullish on sectors like energy, large infrastructure, NBFCs, insurance, asset management companies, private sector banks, hotels, pharmaceuticals, telecom, FMCG, and food processing. However, it maintains a cautious stance on manufacturing due to uncertainties in input costs and supply chain disruptions.
Looking forward, Quant Mutual Fund believes the current volatility phase could present significant buying opportunities akin to those during the COVID-19 pandemic. It advises investors to monitor market sentiment extremes closely to identify opportunities and rebalance portfolios accordingly.
