New Delhi, March 17 Financials and infrastructure are expected to remain the primary drivers of India’s equity markets as near‑term volatility from global tensions will be offset by strong macroeconomic environment, a report said on Tuesday.
Despite "elevated market volatility in near term" due to geopolitical developments and commodity price movements, "India’s broader macroeconomic environment demonstrate resilience, reinforcing the long-term attractiveness of Indian equities," said the report from PL Wealth, the wealth management arm of PL Capital.
India’s macroeconomic fundamentals remain resilient, supported by strong domestic consumption, robust infrastructure spending and healthier corporate balance sheets.
Strong credit growth, improving asset quality and rising financial penetration support earnings visibility across banks and financial institutions, the report said.
Infrastructure and capital goods companies are set to benefit from the government’s continued focus on infrastructure development and an accelerating capital expenditure cycle, the firm said.
In the short term (0-6 months) markets may remain range‑bound as investors prefer gradual capital deployment, while in the medium term (6-24 months), improving corporate earnings and sustained infrastructure spending are expected to support financials, infrastructure and industrials, the firm forecasted.
Looking further ahead (24–60 months), rising consumption, expanding financial markets, digital transformation and infrastructure development are expected to drive sustained economic expansion.
Central bank purchases and portfolio diversification strategies are expected to provide continued support for gold prices. Silver, while supported by industrial demand, is expected to remain more volatile and tactical compared to gold, it predicted.
The automobile sector continues to benefit from steady domestic demand, premiumisation trends and improving export opportunities, while consumer-focused businesses remain structurally attractive due to rising incomes, urbanisation and evolving consumption patterns.
Global technology spending cycles may introduce short-term volatility in the information technology sector, but long-term demand for digital services remains intact, it noted.
Defensive sectors such as healthcare, energy and utilities are expected to provide relatively stable earnings visibility during periods of market uncertainty.
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