New Delhi, July 17 (IANS) The view on Indian equities remains constructive as resilient domestic growth, improving private capex prospects, and potential trade deals with the EU and US act as medium-term tailwinds, a report said on Friday.
India’s growth and investment cycle should support equities as oil and fertiliser prices ease, policy cuts bolster demand and private capex prospects improve, the report from HSBC Mutual Fund said.
The thaw in the Middle East conflict and a correction in crude and fertiliser prices to pre‑conflict levels are major macro positives that should support growth in H2FY27, the report said.
“We believe the government should be able to boost infra spending in H2FY27 although the full year may be flattish given the impact of the conflict on government finances,” the fund house said.
The report forecasted that India’s growth should remain robust in FY27, supported by the interest rate cuts by RBI, the GST rate cut, and income tax rate cut announced by the Union government in FY26.
These factors should support consumption and private sector capex, it said, adding that the risk of a below normal monsoon with negative consequences for food production and leading to higher food inflation is also another stress in the near term.
India’s investment cycle is likely to be on a medium-term uptrend supported by government investment in infrastructure, support to manufacturing and pickup in private investments.
Announcements of potential trade deals with the EU and US should help support private capex driven by improved medium term tariff certainty and export competitiveness.
In June, BSE Sensex and NSE Nifty were up 2.6 per cent and 1.7 per cent, respectively, while broader market indices such as NSE Midcap index edged up 1 per cent and BSE Smallcap index surged 5.4 per cent.
Banks were the best performing sectors in June, followed by realty and healthcare. Autos and capital goods also delivered positive returns.
—IANS
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