While the US tariff uncertainty has drawn attention, the focus should remain on India’s domestic growth measures, suggests Vikas Khemani, Founder of Carnelian Asset Management & Advisors, which manages funds worth ₹7,557 crore currently.“US tariff uncertainty has been long talked about, but it is not very significant from an economic impact perspective,” Khemani said. He added that both economies are important to each other and that “the continuation of a 50% tariff is not going to go on for long.”He said the more important factor is the Reserve Bank of India’s pro-growth stance. “What the RBI governor is doing is far more important than what Trump is doing,” Khemani noted, highlighting rate cuts, liquidity support, and reforms to boost credit growth. With the government also focusing on infrastructure spending and tax reforms, he expects these measures to reflect in corporate earnings in the second half of the year.
Also Read | CLSA sees Nifty at 26,300 by year-end; gold may hit $4,100, silver $50 before pauseOn foreign investor trends, Khemani explained that foreign institutional investor (FII) flows are linked to US Federal Reserve rate changes rather than trade tensions. He said, “India was significantly overweight when China was not doing well. As Fed rates start coming down, we will see more FII flows coming into India.”
He added that liquidity and corporate earnings are expected to remain strong as uncertainties around tariffs and policy settle.Discussing digital and platform-based businesses, Khemani said the sector has matured since 2021. “The more they burnt money, the more valuation they got earlier,” he said, but added that now most platforms are shifting “from burning to earning” by focusing on operating leverage and sustainable models.Also Read | Bandhan AMC’s Manish Gunwani sees market in consolidation phase, favors metals and innovation themesOn the market outlook, he expects strong performance from banks and companies linked to the investment cycle. “Credit growth will pick up significantly. You will see banks doing pretty well,” Khemani said, adding that infrastructure firms such as L&T and consumer discretionary businesses could also benefit from lower interest rates and tax cuts.He advised investors to be selective and avoid hype-driven stocks. “I would avoid hype stocks where there’s no risk, you understand,” he said, while adding that consumer staples offer less attractive returns compared with other sectors at current valuations.For the full interview, watch the accompanying videoCatch all the latest updates from the stock market here
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