Given India’s recent underperformance compared to developed markets like the US and emerging markets like China, Paroda sees selective opportunities in financial and cement stocks, where market expectations have been muted.
Financial stocks, which lagged over the past 3-4 years, are now rebounding, while cement stocks continue to show resilience. “It’s a very selective market for India in the near term,” he noted.
Paroda highlighted the potential impact of global trade policies on market sentiment, pointing to the upcoming April 2 deadline for tariff decisions under US President Donald Trump’s administration.
Trump has pushed for reciprocal trade policies, particularly with Mexico and Canada, delaying key tariff announcements until April.“Markets are going to be range-bound until we see how the administration proceeds with these tariffs,” Paroda explained.
Despite initial concerns that Trump’s policies would negatively impact China, the MSCI China index has surged 16% this year, driven by inflows into its technology sector. Meanwhile, India has struggled with continued FII outflows.
Paroda attributed China’s strength to its investments in cloud computing and technological innovation, while India is undergoing a temporary phase of earnings recalibration.
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