According to Pramod Gubbi, co-founder of Marcellus Investment Managers, global macroeconomic concerns could pose downside risks to Indian markets over the next few weeks. As reported by NDTV Profit, Gubbi noted that while corporate earnings for both the December and June quarters have surprised positively over the past six months, worsening global macro conditions, particularly uncertainty around crude oil prices, remain a key concern for markets. He warned that if global macro remains challenging around oil prices, interest rate hikes could eventually weigh on economic growth and equity markets.
Among sectors, financials stand out for their combination of valuations and growth, according to Gubbi's analysis. As reported by NDTV Profit, he stated that "financials is the only sector with healthy valuations," highlighting the sector's relatively attractive risk-reward profile. The investment manager is also positive on manufacturing exports, which have benefited from rupee depreciation, the China-plus-one strategy, trade deals and government support. He sees significant export opportunities emerging across chemicals, engineering goods, auto ancillaries and textiles.
Healthcare remains another sector where Gubbi remains positive, supported by strong structural growth drivers. According to NDTV Profit, on the consumption side, Gubbi expects some improvement in consumer volumes, particularly in the consumer staples segment. He noted that investors are closely watching volume growth in staples as a key indicator of the health of rural and urban consumption. However, valuations remain a concern across large parts of the market, with Gubbi stating that very few counters currently offer healthy valuations, making sector selection particularly important.
Gubbi cautioned that prolonged geopolitical headwinds could become increasingly worrisome for investors. As reported by NDTV Profit, rising input costs could further pressure corporate profitability, with gross margin compression likely to continue for some time. Despite earnings resilience providing a positive backdrop, Gubbi believes investors need to remain cautious as global macroeconomic and geopolitical risks could keep markets volatile in the near term.
