Dr. Vikas Gupta, CEO and Chief Investment Strategist, OmniScience Capital

“Indian equity markets remain under pressure due to persistent FII selling, largely driven by US factors—particularly Trump Policy Uncertainty—rather than domestic challenges. Despite the RBI’s rate cut and a pro-growth Union Budget, foreign inflows have yet to recover.

However, the upcoming Modi-Trump meeting could result in a “mini deal” on trade, potentially boosting market sentiment. Additionally, the ₹16 lakh crore capex plan outlined in the Union Budget is a long-term growth catalyst that has yet to be fully appreciated by the market.

With inflation aligning toward the RBI’s 4% target and GDP growth dipping below 7%, the central bank has prioritized economic expansion with a 25 bps rate cut while maintaining a neutral stance—balancing inflation risks with the need for growth.

Meanwhile, the rupee’s sharp depreciation, driven by concerns over potential US trade tariffs, may prompt RBI intervention. Rising US Treasury yields and capital outflows from emerging markets continue to weigh on sentiment. Even as the BJP’s electoral victories in Haryana, Maharashtra, and Delhi should have bolstered investor confidence, global uncertainties have overshadowed domestic factors.

While trade tensions persist, recent US negotiations with Mexico and Canada indicate that tariffs are more of a bargaining tool than a long-term economic threat. Additionally, de-escalation in conflicts like the Israel-Hamas and Ukraine-Russia wars could contribute to a more stable investment climate.

Key growth sectors include banks, power, housing finance, infrastructure NBFCs, EPC, and logistics. Defense, railways, and IT remain attractive but require careful valuation. Despite global headwinds, India’s economic prospects remain strong.”