ETMarkets Smart Talk: Gold, infra, FMCG, and fixed income - Kush Gupta's dual strategy to tackle market volatility
Live Events
(You can now subscribe to our
(You can now subscribe to our ETMarkets WhatsApp channel
In this edition of ETMarkets Smart Talk, Kush Gupta, Director at SKG Investment & Advisory, shares his insights on navigating the current market volatility with a well-rounded investment approach.Amid global uncertainties and tariff tensions, Gupta advocates a dual strategy—diversifying into domestic growth sectors like infrastructure FMCG , and agriculture, while also building exposure to safe-haven assets like gold and fixed income instruments.He believes that with valuations turning attractive and India's consumption story intact, long-term investors have a real opportunity to create wealth, even in turbulent times. Edited Excerpts –A) Equity markets always come along with their fair share of excitement and volatility. For a long-term investor, these events provide a clear opportunity to add quality stocks to their portfolio and be part of businesses that will show growth when the tide turns over.The Nifty50 Index has recovered approximately 15% from its peak and the Index PE is down to 20.5, bringing it to the levels we saw two years ago. This is also the first major downfall since the V shaped recovery after COVID-19.I think it is a good time to start investing again and build a portfolio that could generate wealth in the next bull run. Indian economy is still young with a lot of head room for growth.We are becoming a consumer-led economy, once that can sustain global shocks and continue on its right path to provide investors with year-on-year portfolio returns.A) The tariff wars have been having global ramifications and will possibly change geopolitics for years to come. Most economies around the world rely on exports of goods & services to generate income, from larger countries like China to smaller ones like Bangladesh, Vietnam are all heavily dependent on exports.I think that a continuation of these tariff wars will create a hostile business environment with long term negative impacts on the markets.Currency movement across the world will slow down, foreign investments will reduce, and supply chain management will impact production which could lead to inflation in several markets.International trade will reduce, which will lead to cost-cutting measures, decrease capex and halt expansion plans in several key sectors that rely heavily on it.A) The much-anticipated rate cut by RBI was in line with the monetary policy, it has come with the intention to easy money circulation and propel growth in the economy.While this was expected, the slashing of GDP forecast was not until the tariff wars started. With US imposing very high tariffs and sending markets into a frenzy, it is indicated that global GDP growth could slow down to 2.3% in 2025.To assume that this will not affect India will be naïve, while our US exports only account for 1% of our GDP, we may not see a very big direct impact but a slow down across the world and specifically in US will definitely impact India Inc.Silver lining is that India is more of a consumer led economy rather than an export led, so we are better positioned to navigate this storm.I think Q1 & Q2 of FY26 will be under strain but towards the end of 2025 we will find our feet back on the ground.A) I have always been an admirer and firm believer in Indian markets. Our growth story is consumption led with increasing demand in both rural and urban areas.Our demographic advantage ensures enough head room for more growth. If investors have a 3–5-year horizon then I think one can consider entering the markets now.For an emerging economy we are well positioned by not relying on exports as much as other developing countries, so our fundamentals are still in place and are not shaken by these tariff wars.This global shake-up will find its ground and then growth economies will show promising numbers. Much of the selling in the Indian stock markets is because of sentiment and uncertainty and not because of change of narrative regarding the Indian growth story.Investors looking to deploy cash can start as the valuations look attractive with Nifty having corrected almost 15% from its peak.A) Indian investors are eagerly waiting for Q4 earnings numbers to start coming in. Q3 of FY25 was disappointing with the earnings slowdown across most of the sectors. We expect this quarter to outperform the last one as there were some green shoots across certain sectors like FMCG and finance.Consumer sentiment across Auto and durables was looking strong. Historically we have seen that end of the financial year drives higher revenue in these sectors.Government spending on infrastructure also increases in the tail end of the financial year, which is good for capital goods, infra companies and cement.Structurally, the last quarter has its advantages hence expectations are higher, along with the fact that a cyclic upside in earnings after a disappointing two quarters is also a strong reason.I think investors will get a much needed breather once the results start coming in.A) We have primarily focused on two things to safeguard our portfolio from the current volatility. First is diversification into commodities, I think while gold has gone up very significantly , its bull run may not be over yet.With growing concerns over global trade and instability of dollar, gold still remains go to safe haven across the world.Second is sectoral calls, we are looking at sectors that are linked to consumer growth and reflect India's domestic needs such as Infra, FMCG, Agriculture and Defence.I think these are essential pockets that are sustained from our internal ecosystem and global volatility does not shake them as much.At a juncture where international relations are strained, a defensive and inclusive approach towards investing is a good tactical call.A) Fixed income bonds or any other debt instrument play an important role in any investor's portfolio.When we advise our clients, we always have an allocation in mind towards debt funds/debentures and bonds depending upon their age, risk profile, income and other parameters.Apart from the clients' profile, often it's the markets that makes you rethink your allocation, and right now we are at that moment.I think in the given scenario we can expect further rate cuts and investing in corporate bonds with a fixed return for the next 24-36 months is a good idea.Further, RBI is doing a good job at currency management and due to India's fiscal discipline our fixed income market is attractive to global investors.If the tariff wards continue, we could also see downfall in dollar and rupee appreciating which will further make Indian bonds more attractive to foreign investors.I see the volatility in equity markets as a good opportunity to create wealth in the bond markets for investors.(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Indian Express
26 minutes ago
- Indian Express
Delhi govt mulls bringing back private liquor vends under new excise policy
Private players could make a comeback in Delhi's liquor shops. The Delhi BJP government, which is preparing a new excise policy, is considering reintroducing private liquor shops in the Capital — just as it was in the old excise regime before 2021. The government plans to implement the new policy by July 1 with an aim to increase revenue, curb corruption and bring transparency. According to sources, the government is likely to provide licences to private players to provide a good walk-in experience for customers. 'About 100-150 private liquor shops, mostly in malls and other premium locations, are being considered. The numbers will be finalised once the policy is ready. The modalities of how to issue the licence, whether through an e-auction or e-lottery, are currently being discussed. A meeting of a high-level committee set up to prepare the policy, which is headed by the Chief Secretary, was also held on Friday. Issues such as the number of shops, licensing, etc, were discussed,' sources said. Under the pre-2021 policy, both government and private liquor shops operated in Delhi. In November 2021, the government — the AAP was in power at the time — had exited the liquor business and handed things over to private vendors, with an aim to cut down corruption. The policy soon ran into controversy and investigations by multiple agencies like the Enforcement Directorate and the Central Bureau of Investigation. In 2022, the government scrapped this policy and brought back the old excise regime — but only liquor shops run by government corporations were allowed to operate. Almost all top AAP — including former chief minister Arvind Kejriwal, AAP Rajya Sabha MP Sanjay Singh, and former deputy chief minister Manish Sisodia — were jailed in the case. Currently, a major issue facing Delhi is the unavailability of popular and good quality brands of whisky, beer, vodka, gin, and several others. 'Some popular brands are not in Delhi as their parent company was blacklisted from selling liquor in the national capital following complaints of irregularities and court cases during the implementation of the now-scrapped liquor policy… Less popular brands have entered the scene, which has pushed customers to neighbouring states… The government is planning to increase the availability of popular brands and is likely to reintroduce some that are currently not available in Delhi shops…,' said sources. Popular choices like Chivas Regal, Blenders Pride and Royal Stag, part of the Pernod Ricard brand, are not available in Delhi. Pernod Ricard India's application for an L-1 licence was rejected earlier. Benoy Babu, a regional manager at PRI, was a witness in the CBI's excise case. Babu was eventually arrested by the ED. Meanwhile, discussions on rationalising brand licence fees and retail margins are also underway, said sources, adding that excise duty and retail licensing are also likely to be increased under the new policy. 'The retail margin cap is Rs 50 for Indian-Made Foreign Liquor and Rs 100 for foreign liquor. This is on a per-bottle basis. Government-run shops have monopolised the retail business by pushing less popular brands at the range of Rs 400 to Rs 600, instead of stocking premium brands. Also, cheaper brands sell fast… Thus, discussions are on to rationalise these margins to increase revenue as well as make premium brands available for customers,' said sources. Industry sources said private retailers have started searching for properties in the city to set up shop. Currently, there are over 700 liquor shops in Delhi run by the four government corporations — Delhi Tourism and Transportation Development Corporation, Delhi State Industrial and Infrastructure Development Corporation, Delhi Consumer's Cooperative Whole-sale Store and Delhi State Civil Supplies Corporation. The Excise Department has asked the four corporations to carry out document validation online by June 30. Last week, Chief Minister Rekha Gupta said several reforms will be incorporated into the new policy, including scientific testing of liquor quality, digitisation of the sale system, curbing illegal sales, and ensuring transparency in the licensing process. The high-level committee is also studying policies implemented in Delhi earlier and those in neighbouring states.
The Hindu
39 minutes ago
- The Hindu
FATF report links dual-use cargo seized by India in 2020 to Pakistan missile agency
A dual-use equipment seized by India from a Pakistan-bound merchant vessel in 2020 is linked to Islamabad's National Development Complex, which is involved in the country's missile development programme, a new report by the Financial Action Task Force (FATF), the global anti-terror financing watchdog, has said. The report listed the case under a section on the misuse of the maritime and shipping sectors, including to transport a range of commodities, including dual-use equipment. 'In 2020, Indian Customs authorities seized an Asian-flagged ship bound for Pakistan. During an investigation, Indian authorities confirmed that documents mis-declared the shipment's dual-use items,' the FATF report said. 'Indian investigators certified the items for shipment to be 'autoclaves', which are used for sensitive high-energy materials, and for insulation and chemical coating of missile motors,' the report said. It said these sensitive items are included in dual-use export control lists of the Missile Technology Control Regime (MTCR). The bill of lading of the seized cargo provided evidence of the 'link between the importer and the National Development Complex, which is involved in the development of long-range ballistic missiles', it said. The export of equipment such as autoclaves without formal approval from various authorities is a violation of the existing law, the FATF said. Pakistan's National Development Complex (NDC) has played a crucial role in the development of Pakistan's missile programme. India seized the dual-use equipment from merchant vessel Da Cui Yun at Kandla port in Gujarat on February 3, 2020. Loopholes The report noted significant vulnerabilities in the global financial system in countering the financing of weapons of mass destruction (WMD). "Despite the grave threat posed by proliferation financing, only 16 per cent of countries assessed by the FATF and its global network have demonstrated high or substantial effectiveness" in a process that evaluates the implementation of targeted financial sanctions under the United Nations Security Council resolutions on proliferation. The report said that unless the public and private sectors urgently bolster technical compliance and effectiveness, those seeking to finance WMD proliferation will continue to exploit weaknesses in the existing controls. The report provided a detailed analysis of the evolving methods and techniques used to evade proliferation financing-related sanctions. 'Illicit actors are employing increasingly sophisticated methods to evade sanctions and circumvent export controls,' it said.
United News of India
2 hours ago
- United News of India
Afghan dry fruit traders concerned over continued closure of Attari-Wagah border
Kabul, June 21 (UNI) The closure of the Attari–Wagah border crossing, one of Afghanistan's key trade routes to India, has raised serious concerns among dried fruit exporters of Afghanistan. The Kabul Dry Fruit Exporters Union has warned that stopping freight truck movement on this route could severely disrupt both fresh and dried fruit exports, Tolo News reported. The union has urged Pakistani and Indian authorities to reopen the route permanently for Afghan cargo trucks. Khalid Rahmani, spokesperson for the union, told TOLOnews, 'We hope alternative links through Wagah and Chabahar ports will open soon. Given the current political and trade tensions between Pakistan and India, we predict a decline in exports to both countries.' After the Indian and Pakistani military tensions eased, the border reopened briefly on May 9, allowing about 162 trucks to pass, but it was shut again. At least 12 Afghan export trucks remain stuck at the crossing. With the fruit harvest season approaching, traders warn that continued closure could pose major challenges for Afghan exports. They are calling for diplomatic engagement to reopen this critical trade route. Omid Haidari, head of international relations at the Chamber of Agriculture and Livestock, said: 'We urge the leadership of the Islamic Emirate, especially the Ministry of Foreign Affairs, to strengthen contact with the Indian Foreign Ministry so that our major trade route can be reopened.' Merchant Mahboobullah Mohammadi, said, 'Our biggest export is dried fruit, especially pine nuts, which we mostly send to India via Wagah. But the decline in exports this year has brought significant losses. Our air corridors are still shut, and large amounts of pine nuts remain unsold in local markets.' The Wagah border was closed after tensions escalated between India and Pakistan following the terrorist attack in Pahalgam, India, on April 22. The closure of the land border check post continues to cast a shadow over Afghanistan's regional trade. UNI ANV RN
