Indian Equities Poised for Long-Term Growth Amid Global Uncertainty

The report from HSBC Mutual Fund said India's investment cycle is expected to stay strong, supported by infrastructure spending and private capex recovery.

Potential trade deals with the EU and the US are likely to support manufacturing growth and export competitiveness.

The report noted that Nifty valuations are trading near their 10‑year average levels and that near‑term risks persist from geopolitical tensions, high crude prices, weaker rupee, and below normal monsoon forecasts.

The fund house predicted India's growth to remain quite resilient despite the global macro-economic challenges and the country's investment cycle to be on a medium-term uptrend supported by government investment in infrastructure and support to manufacturing.

The Reserve Bank of India is expected to maintain a prolonged pause on policy rates while keeping liquidity supportive, it said.

On debt markets, the fund house remained neutral to underweight on duration positioning amid market uncertainty, as elevated oil prices and geopolitical developments pose inflation and growth risks.

Select segments including 2-3 year corporate bonds and certificates of deposit were seen as attractive, while longer-end government securities may benefit from a potential yield curve flattening.

Equity indices started Q1 FY27 on a positive note after March's sharp correction. The Sensex rose 6.9 per cent and Nifty added 7.5 per cent in April, while the NSE Midcap index gained 13.2 per cent and BSE Smallcap went up 19.6 per cent.

Power, realty and capital goods bounced back sharply and were the best-performing sectors in April. Metals, FMCG, banks, autos and oil & gas also outperformed the Nifty.

Healthcare slightly underperformed the Nifty, while IT was the worst-performing sector, but still ended slightly positive.

- IANS