Emerging markets like India may have already seen a bottom in their equity markets, even as recession concerns continue to cloud the outlook for the United States, according to Arvind Sanger, Managing Partner at Geosphere Capital Management.
In a recent interaction with ET Now, Sanger highlighted the ongoing macroeconomic uncertainty driven by unresolved trade tensions, inflationary pressures, and policy ambiguity in the West, suggesting that the global market trajectory remains unpredictable.
However, he maintained that India’s domestic-facing sectors and relatively stable economic fundamentals may provide a degree of resilience.
Sanger pointed out that while markets in the U.S. remain vulnerable to further downside, particularly in light of tariff disputes with China and uncertain developments in the European Union, India may be better positioned due to its internal economic stability and domestic demand-led growth structure.
“The bottom may be in for many emerging markets like India, given that things might actually… domestic economy is fine and things from a U.S. risk standpoint may lessen somewhat,” he said. The remark underscores a broader distinction in how global risks are perceived in advanced versus emerging economies at this stage of the market cycle.
On the question of whether global markets had found a sustainable bottom, Sanger remained cautious. “I am not so sure because I do not think the recession risk in the US is off the table,” he said, pointing to the continued imposition of tariffs on China, which he described as ‘such an important trading partner’, and uncertainty surrounding Europe.
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He added that there is still a lot of uncertainty about what decisions to make, particularly for businesses, while consumer prices remain at risk.
“You had the Fed chairman talk about the fact that they have to watch inflation,” Sanger noted, suggesting that U.S. monetary policy could remain tighter for longer.
In his view, U.S. President Donald Trump’s recent responses were more in reaction to bond markets rather than equity markets.
“To the extent that the bond markets start acting as a break, then maybe the bottom is [in] equity markets,” he said. “But to the extent that economic slowdown could be a little worse than people expect, then there could still be downside in U.S. markets.”
Despite these global concerns, Sanger believes that Indian equities are in a relatively more stable position, driven by local fundamentals. When asked about investment strategy within India, he reiterated his preference for larger capitalisation stocks and high-quality names with domestic exposure.
“Since I am not completely comfortable with the global risks and the global growth scenario, I still would favour larger caps,” he told ET Now.
He added that certain domestic-oriented sectors could also show relative strength.
“Power demand has been weak, maybe that comes back to life. Steel, cement, these are sectors which are more domestic facing,” Sanger said. He also noted the possibility of trade-related policy measures, such as “some tariffs coming on Chinese steel imports,” which could influence demand in these sectors.
FMCG stocks, which have been a traditional defensive play, were also highlighted. “FMCG stocks have been a place to hide out in the recent past,” he said.
Overall, Sanger emphasized that whether large or mid-cap, the focus should remain on domestic-facing higher-quality companies, as they are better positioned amid ongoing global volatility.
“We do not think that the markets have given an all-clear signal where global risk is back on completely,” he concluded.
Also read: 10 BSE smallcap stocks that can rally 110-210% in the next 12 months
( Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
In a recent interaction with ET Now, Sanger highlighted the ongoing macroeconomic uncertainty driven by unresolved trade tensions, inflationary pressures, and policy ambiguity in the West, suggesting that the global market trajectory remains unpredictable.
However, he maintained that India’s domestic-facing sectors and relatively stable economic fundamentals may provide a degree of resilience.
Sanger pointed out that while markets in the U.S. remain vulnerable to further downside, particularly in light of tariff disputes with China and uncertain developments in the European Union, India may be better positioned due to its internal economic stability and domestic demand-led growth structure.
“The bottom may be in for many emerging markets like India, given that things might actually… domestic economy is fine and things from a U.S. risk standpoint may lessen somewhat,” he said. The remark underscores a broader distinction in how global risks are perceived in advanced versus emerging economies at this stage of the market cycle.
On the question of whether global markets had found a sustainable bottom, Sanger remained cautious. “I am not so sure because I do not think the recession risk in the US is off the table,” he said, pointing to the continued imposition of tariffs on China, which he described as ‘such an important trading partner’, and uncertainty surrounding Europe.
Also read: Nifty likely to witness profit booking, suggests Rahul Sharma. Highlights 3 stock ideas
He added that there is still a lot of uncertainty about what decisions to make, particularly for businesses, while consumer prices remain at risk.
“You had the Fed chairman talk about the fact that they have to watch inflation,” Sanger noted, suggesting that U.S. monetary policy could remain tighter for longer.
In his view, U.S. President Donald Trump’s recent responses were more in reaction to bond markets rather than equity markets.
“To the extent that the bond markets start acting as a break, then maybe the bottom is [in] equity markets,” he said. “But to the extent that economic slowdown could be a little worse than people expect, then there could still be downside in U.S. markets.”
Despite these global concerns, Sanger believes that Indian equities are in a relatively more stable position, driven by local fundamentals. When asked about investment strategy within India, he reiterated his preference for larger capitalisation stocks and high-quality names with domestic exposure.
“Since I am not completely comfortable with the global risks and the global growth scenario, I still would favour larger caps,” he told ET Now.
He added that certain domestic-oriented sectors could also show relative strength.
“Power demand has been weak, maybe that comes back to life. Steel, cement, these are sectors which are more domestic facing,” Sanger said. He also noted the possibility of trade-related policy measures, such as “some tariffs coming on Chinese steel imports,” which could influence demand in these sectors.
FMCG stocks, which have been a traditional defensive play, were also highlighted. “FMCG stocks have been a place to hide out in the recent past,” he said.
Overall, Sanger emphasized that whether large or mid-cap, the focus should remain on domestic-facing higher-quality companies, as they are better positioned amid ongoing global volatility.
“We do not think that the markets have given an all-clear signal where global risk is back on completely,” he concluded.
Also read: 10 BSE smallcap stocks that can rally 110-210% in the next 12 months
( Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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