Gupta also flagged uncertainty around global energy supply, especially linked to geopolitical developments. On top of that, concerns around AI disruption and the possibility of a weaker monsoon add to the downside risks.
Despite recent gains, he believes the market may remain largely range-bound over the next year, with limited upside and a higher probability of corrections if key risks play out.Gupta added, “We expect a fairly range bound market, the upside being limited to just 5-7%. The downside, however, can really depends on what you assume or factor in, especially when it comes to the oil prices, the monsoon, and obviously the AI risk, which was getting momentum or is getting worse, so the downside could be another 5- 10%.”
Also Read | De-escalation hopes rise in Hormuz, AI investment cycle remains market driver: Matt OrtonOn broader markets, Gupta said mid- and small-caps have already rebounded and are no longer cheap. In the current environment, he prefers large-cap stocks, which are better positioned to handle economic volatility.
While power demand is seeing a surge due to heatwaves and rising data centre activity, he noted that valuations across power and related segments remain expensive, limiting fresh opportunities from a stock-picking perspective.
On election outcomes, Gupta said market impact is likely to be short-lived. According to him, factors like oil prices, inflation, and monsoon trends will matter far more for investors than political developments in the near term.
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