According to CNBC TV18, Prashant Paroda, Portfolio Manager, Emerging Markets, Allspring Global Investments, expects Indian equities to find support as the West Asia conflict remains paused. Paroda noted that both Iran and the US fighting has paused, with both parties looking for solutions to the problem. He believes that as long as the fighting has paused, equities will catch a bid, with investors assuming solutions are being worked on behind the scenes.
As reported by CNBC TV18, Paroda highlighted that two-wheelers have done really well and positively surprised a lot of names in the auto sector. The portfolio manager is looking at this sector and positioning accordingly. However, he noted that the Indian market issue right now is that heavyweights like HDFC Bank, ICICI Bank, or Reliance Industries are not really firing this year, which puts a lid on overall index gains. He expects clarity on HDFC Bank's extension and anticipates some company heavyweights might start performing towards the back end of the year.
According to CNBC TV18, Paroda sees defence as a potential next-level growth opportunity as large corporates enter the sector through new tie-ups. He noted that the defence vertical is still very early, and currently, the way to play defence is through listed names. However, with these tie-ups, he believes that will be the next level of growth that people are not really pencilling in today. If defence becomes a big opportunity, he expects a lot of these large corporates to participate in that as well.
As reported by CNBC TV18, Paroda is adding to industrials while selectively evaluating small- and mid-cap stocks. He has been selectively looking at some of the small- and mid-cap names, some of which have run up, so he's been trimming them. However, he remains positive on auto ancillaries, even though some names have already run up. He thinks the industrials sector should perform well going into next year.
According to CNBC TV18, Paroda noted that July was weak for Korea and artificial intelligence stocks, and as soon as it was weak, a lot of sectors in India caught some bid. He explained that people are still playing India as an opportunity if AI kind of stalls or has hiccups throughout. He expects the picture to become clearer as these AI companies come to the market, with Anthropic expected to IPO faster than OpenAI and both companies stacked by the end of this year. The market will adjust to expectations and these companies will have to beat expectations on a quarter-on-quarter basis going through the second half of the year.
