In a surprising contrarian call, Srivastava recommended avoiding precious metals. He described this as an ‘asset allocation call’, stating that after an exceptionally strong performance, it is now time to pivot.
“Going into 2026, our strategy report said equity is the new gold, which is basically saying that this is the year you need to shift away from precious metals back to equity,” he concluded.Read Here | Why Dipan Mehta is bullish on CV stocks but cautious on IT and new-age tech
For the near term, Srivastava identified several key investment themes. He pointed to interest rate-sensitive sectors as the ‘easiest bet’. Financials, which have been top performers, are expected to remain on investors’ lists.
He expressed a particularly bullish view on metals, arguing, “There is a case for it to do significantly better as the dollar continues to weaken and interest rates continue to drop, both in the US and India.”
The automobile sector was his third pick, noting that it has been outperforming and is likely to continue doing so. Beyond these, he suggested that a bottom-up stock-picking approach could reveal opportunities in corrected mid- and small-cap energy stocks.Assessing the market’s performance, Srivastava noted that India has managed a ‘balancing act’ throughout the year, with policy measures like corporate tax cuts, interest rate reductions, and the implementation of the Goods and Services Tax (GST) helping to cushion the economy.
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He highlighted that strong domestic flows have been a critical factor in supporting the headline indices. “While the market over the last one and a half year has gone through a corrective phase… domestic flows have really not slowed down,” he stated.
This resilience has been most evident in the Nifty, which has managed to hold its ground even as the broader market, particularly mid- and small-cap stocks, witnessed a significant correction.
According to Srivastava, this sell-off has brought valuations in the mid- and small-cap space to more attractive levels. “Some of these stocks used to be at P/E ratios of 80, 100 or more… the ones that are showing growth have managed to bring those valuations down to even the 30s or less in many cases,” he explained. This divergence, he believes, could set the stage for a new upward rally.
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