Neeraj Seth, Founder and CIO at 3R Investment Management, said market conditions make broad index investing challenging due to sharp sectoral divergence.“This is a challenging time to be an index buyer,” Seth said, pointing to rotations across sectors and multiple global concerns, including geopolitics, artificial intelligence (AI) disruption, and credit market stress.
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However, he added that India is approaching a more favourable entry point for investors. “It’s near a buy zone,” Seth said, citing currency stabilisation and tariff developments as supportive factors for sentiment.
Seth said early indications of earnings improvement are emerging across sectors such as financials, manufacturing, and industrial companies.
Seth expects earnings momentum to strengthen through the year, supported by capital expenditure activity and steady credit growth. Financial stocks remain a preferred area, helped by clean balance sheets and adequate capital levels.Seth also highlighted opportunities in non-banking financial companies, commercial vehicles, and consumer discretionary segments, while remaining cautious on IT services and expensive pockets of the market.
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Rakshit said bond yields continue to reflect expectations of future government and state borrowings, but are unlikely to slow lending activity.
Credit growth remains stable, supported by liquidity conditions and central bank policy. Rakshit expects lending activity to remain within a normal range despite elevated bond yields.
On concerns about AI-driven economic disruption, Seth said structural changes are real but unlikely to affect macroeconomic growth immediately.
“I don’t think it’s a huge scare for this year,” Seth said, adding that AI’s economic impact will unfold gradually over time.
For the full interview, watch the accompanying video
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