Indian Stock Market Sees Optimism Amid Global Challenges

Mumbai: Despite concerns over sticky inflation, elevated interest rates, and a slowdown in India's economy, many market veterans and fund managers believe that the Indian stock market is well-positioned to grow in the face of global challenges.

Increased capital expenditure from the government and corporates are seen as key triggers for the revival of consumption and investment, which in turn will drive growth. Fund managers point out that the slowdown observed in the first half of the current financial year is cyclical, attributed to low government spending and erratic monsoon, rather than a structural issue with the Indian economy.

Senior fund manager Shiv Chanani, Equity at Baroda BNP Paribas Mutual Fund, expects a gradual recovery in government spending and GDP growth going forward. He believes that easing global geopolitical tensions and a strong dollar will mean that commodity prices will likely remain under control.

Karan Doshi, Fund Manager - Equity at LIC Mutual Fund Asset Management, highlights the growing trend of supply chain diversification as a significant opportunity for India to become a major player in the global supply chain network. He believes favourable demographics, rising productivity, and government reforms will drive sustained growth.

"We are witnessing some sort of slowdown due to weak government spending...It's a cyclical problem that can be resolved as the health of the balance sheets of the government and corporate sectors is strong," said Amit Ganatra, Head of Equity at Invesco Mutual Fund.

Abhishek Jaiswal, Fund Manager of Finavenue, notes that India's economy continues to rank high on the global stage due to structural growth, robust corporate fundamentals, and strategic policy reforms. He emphasizes emerging industries such as battery energy storage, green hydrogen, biotechnology, semiconductors, and AVGC as poised to fuel India's next phase of investment-led growth.

"India's ambitions to decarbonise, including a target of 500 GW renewable energy capacity by 2030, further bolster its growth prospects," Jaiswal observed. Experts see ample opportunities in the IT, banks, FMCG, and infra sectors for investors.

With the government stepping up investments in the second half, sectors such as infrastructure, defence, and railways may witness recovery, while FMCG appears attractive in terms of valuation. Banks are expected to bounce back after rate cuts, resulting in a possible pick-up in credit growth.

Overall, despite global challenges, market veterans and fund managers remain bullish on the Indian stock market, seeing underlying strengths and opportunities for sustained growth in the coming years.