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Nifty Pulls Back After Reclaiming 25,800 Even As Banks & IT Shine; All Eyes On RIL Q3| Closing Bell Live

Nifty Pulls Back After Reclaiming 25,800 Even As Banks &amp; IT Shine; All Eyes On RIL Q3| Closing Bell Live

Sensex and Nifty rose as Infosys raised its revenue forecast, boosting IT stocks., Infosys shares rose 5%, lifting the Nifty IT index by almost 3%., Global cues, lower crude prices, and trade deal hopes boosted market sentiment.

* Sensex and Nifty rose as Infosys raised its revenue forecast, boosting IT stocks.
* Infosys shares rose 5%, lifting the Nifty IT index by almost 3%.
* Global cues, lower crude prices, and trade deal hopes boosted market sentiment.

Sensex and Nifty rose on Friday, driven by strong IT stock gains after Infosys’ upbeat results and raised guidance. Positive global cues, lower crude prices, India-US trade deal hopes, and reduced market volatility also boosted investor sentiment.

shorts/business/sensex-gains-400-pts-nifty-near-25-800-buying-in-it-shares-among-key-factors-behind-market-rise

* Sensex and Nifty rose as Infosys raised its revenue forecast, boosting IT stocks.
* Infosys shares rose 5%, lifting the Nifty IT index by almost 3%.
* Global cues, lower crude prices, and trade deal hopes boosted market sentiment.

The equity benchmark indices Sensex and Nifty traded higher on Friday, tracking strong buying interest in IT stocks after Infosys reported better-than-expected quarterly results and raised its full-year revenue growth guidance.

The Sensex settled 187.64 points or 0.23 percent higher at 83,570.35, while the broader Nifty advanced to 25,694.35, up 28.75 points or 0.11 percent.

Strong buying was seen in IT shares as <a href="https://www.moneycontrol.com/india/stockpricequote/computers-software/infosys/IT">Infosys</a>, Wipro and Tech Mahindra were among the top gainers in the Nifty50 pack, rising up to 5 percent, while <a href="https://www.moneycontrol.com/india/stockpricequote/pharmaceuticals/cipla/C">Cipla</a> and ETERNAL were among the major laggards, declining up to 2 percent.
<h3>Key factors behind market rise</h3>
1) Buying in IT shares: <a href="https://www.moneycontrol.com/news/business/stocks/infosys-shares-jump-over-4-after-q3-results-brokerages-upbeat-on-guidance-hike-deal-wins-13774937.html" target="_blank">Shares of Infosys surged over 5 percent</a>, best in four months, after the IT major posted its Q3 FY26 results and revised its revenue growth outlook upward. The country’s second-largest software services exporter raised its revenue forecast to 3–3.5 percent from 2–3 percent earlier, citing stable discretionary spending and improved momentum in the financial services segment.

The rally in Infosys also lifted sentiment across the IT pack, with all 10 constituents of the Nifty IT index trading higher. The Nifty IT index emerged as the top sectoral gainer, rising nearly 3 percent to 38,851.85.

"Markets have received a boost from Infosys' results and commentary. With IT company valuations at attractive levels, there is buying interest and short-covering in the sector," Kranthi Bathini, director of equity strategy at WealthMills Securities told Reuters.

Analysts said Infosys is well-positioned to win market share through stronger AI partnerships and deeper client engagement.

2) Positive global cues: Cues from global markets further supported domestic equities. In Asia, South Korea’s Kospi index was trading higher, while US markets ended in the green overnight.
<h3><a href="https://www.moneycontrol.com/news/business/markets/stock-market-live-updates-gift-nifty-indicates-a-flat-opening-us-markets-gain-asia-mixed-liveblog-13774705.html" target="_blank">Stock Market LIVE Updates</a></h3>
3) Crude declines: Lower crude oil prices also aided sentiment. Brent crude, the global oil benchmark, slipped 0.24 percent to USD 63.61 per barrel. Declining oil prices tend to ease inflationary pressures and reduce India’s import bill, which is supportive for equity markets. Oil prices settled down around 4 percent on Thursday on easing concerns over potential U.S. military action against Iran, supply disruptions.

4) India-US trade deal hopes: Investor sentiment was also buoyed by hopes of progress on an India-US trade deal. Commerce Secretary Rajesh Agrawal has said the first tranche of the proposed agreement, aimed at lowering reciprocal tariffs on Indian exports, was close to being finalised, though no timeline could be committed. He said negotiating teams from both sides were in continuous talks following a virtual meeting between Commerce Minister Piyush Goyal and the US Trade Representative last month.
<h3><a href="https://www.moneycontrol.com/news/business/first-tranche-of-india-us-trade-deal-near-but-can-t-put-a-date-on-it-says-commerce-secretary-13774307.html" target="_blank">First tranche of India-US trade deal near</a></h3>
5) Decline in fear gauge: The India VIX, a measure of market volatility, declined 1.24 percent to 11.18. A lower VIX indicates reduced fear among investors and generally supports risk-taking in equities.

6) Buying in bank shares: Strong buying was seen in heavyweight bank shares, ahead of the December quarter results by HDFC Bank, ICICI Bank, IDBI Bank and Yes Bank on January 17.
<h3>Technical Analysis </h3>
On the technical front, Anand James, Chief Market Strategist at Geojit Investments Ltd, said support around the 25,600 level has helped a reversal pattern take shape in the Nifty. He said sustained trading above 25,715 would be required for further upside, with a potential target of 26,020. However, he cautioned that a slip below 25,600 could increase the chances of a decline towards 25,060.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

A financial journalist with over 10 years of experience, specialising in tracking stock market movements and fundamental developments that impact investors and the broader economy. A keen observer of global financial markets, I regularly engage with leading market voices to write stories. At Moneycontrol, I focus on decoding market trends, policy shifts and economic changes, driven by a constant passion to learn, analyse, and share knowledge with my readers.

Sensex gains 200 pts, Nifty above 25,650: Infosys-led IT buying among key factors behind market rally

The equity benchmark indices Sensex and Nifty traded higher on Friday, tracking strong buying interest in IT stocks after Infosys reported better-than-expected quarterly results and raised its full-year revenue growth guidance.

The Sensex settled 187.64 points or 0.23 percent higher at 83,570.35, while the broader Nifty advanced to 25,694.35, up 28.75 points or 0.11 percent.

Strong buying was seen in IT shares as Infosys, Wipro and Tech Mahindra were among the top gainers in the Nifty50 pack, rising up to 5 percent, while Cipla and ETERNAL were among the major laggards, declining up to 2 percent.
Key factors behind market rise
1) Buying in IT shares: Shares of Infosys surged over 5 percent, best in four months, after the IT major posted its Q3 FY26 results and revised its revenue growth outlook upward. The country’s second-largest software services exporter raised its revenue forecast to 3–3.5 percent from 2–3 percent earlier, citing stable discretionary spending and improved momentum in the financial services segment.

The rally in Infosys also lifted sentiment across the IT pack, with all 10 constituents of the Nifty IT index trading higher. The Nifty IT index emerged as the top sectoral gainer, rising nearly 3 percent to 38,851.85.

&quot;Markets have received a boost from Infosys' results and commentary. With IT company valuations at attractive levels, there is buying interest and short-covering in the sector,&quot; Kranthi Bathini, director of equity strategy at WealthMills Securities told Reuters.

Analysts said Infosys is well-positioned to win market share through stronger AI partnerships and deeper client engagement.

2) Positive global cues: Cues from global markets further supported domestic equities. In Asia, South Korea’s Kospi index was trading higher, while US markets ended in the green overnight.
Stock Market LIVE Updates
3) Crude declines: Lower crude oil prices also aided sentiment. Brent crude, the global oil benchmark, slipped 0.24 percent to USD 63.61 per barrel. Declining oil prices tend to ease inflationary pressures and reduce India’s import bill, which is supportive for equity markets. Oil prices settled down around 4 percent on Thursday on easing concerns over potential U.S. military action against Iran, supply disruptions.

4) India-US trade deal hopes: Investor sentiment was also buoyed by hopes of progress on an India-US trade deal. Commerce Secretary Rajesh Agrawal has said the first tranche of the proposed agreement, aimed at lowering reciprocal tariffs on Indian exports, was close to being finalised, though no timeline could be committed. He said negotiating teams from both sides were in continuous talks following a virtual meeting between Commerce Minister Piyush Goyal and the US Trade Representative last month.
First tranche of India-US trade deal near
5) Decline in fear gauge: The India VIX, a measure of market volatility, declined 1.24 percent to 11.18. A lower VIX indicates reduced fear among investors and generally supports risk-taking in equities.

6) Buying in bank shares: Strong buying was seen in heavyweight bank shares, ahead of the December quarter results by HDFC Bank, ICICI Bank, IDBI Bank and Yes Bank on January 17.
Technical Analysis 
On the technical front, Anand James, Chief Market Strategist at Geojit Investments Ltd, said support around the 25,600 level has helped a reversal pattern take shape in the Nifty. He said sustained trading above 25,715 would be required for further upside, with a potential target of 26,020. However, he cautioned that a slip below 25,600 could increase the chances of a decline towards 25,060.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Nifty Likely To Tread Water After Back-To-Back Losses; RIL, Infosys In Focus| Opening Bell Live

Indian benchmark indices, Sensex and Nifty, are likely to see a muted opening on January 16, with cues coming from GIFT Nifty, which was trading marginally lower at around 25,779.50.

Track the latest updates on GIFT Nifty right here on Moneycontrol.

Indian markets ended lower in a volatile, rangebound session on January 14 as weakness in auto, IT and realty stocks offset strength in metal, PSU banking and oil &amp;amp; gas counters. Investors stayed on the sidelines ahead of the US Supreme Court's decision on the legality of President Donald Trump's tariff measures.

At close, the Sensex was down 244.98 points or 0.29 percent at 83,382.71, and the Nifty was down 66.70 points or 0.26 percent at 25,665.60.

Here is how financial markets across the globe fared overnight:

GIFT Nifty (Flat)

The GIFT Nifty is trading flat at around 25,779.50, indicating a muted start for the day.

Asian Equities (Mixed)

Asian stocks are set for their longest weekly winning streak since May, with a regional gauge of technology shares climbing to a record as investors step up bets on artificial intelligence.



US Equities (Up)

US stocks rose on Thursday after two days ​of declines as Morgan Stanley and Goldman Sachs shares shot up following upbeat quarterly results, while Taiwan-based chipmaker ‌TSMC's blockbuster results boosted shares of US chipmakers.

The Dow ⁠Jones Industrial Average rose 292.81 points, or 0.60%, to 49,442.44, the S&amp;amp;P 500 gained 17.87 points, or 0.26%, to 6,944.47 and ‍the Nasdaq Composite gained 58.27 points, or 0.25%, to 23,530.02.



US Bond Yield (Flat)

The yield on 10-year Treasuries and 2-year Treasuries was trading with little changed at 4.18% and 3.53%, respectively.



Dollar Index (Flat)

The dollar was poised for a third weekly gain on Friday after positive U.S. economic data lowered expectations for rate cuts by the Federal Reserve anytime soon.



Asian Currencies (Mixed)

Asian currencies were trading mixed in the red in the early trade on Friday, with Indonesian Rupiah, South Korean Won, Thai Baht, Malaysian Ringgit, Taiwan Dollar were trading lower, while Japanese Yen, Philippines Peso, Singapore Dollar, China Renminbi were trading higher.



Crude (Up)

Oil prices were flat on Friday with both Brent and U.S. West Texas Intermediate moving only a few cents from their closing prices after the likelihood of a U.S. strike on Iran receded.



Silver (Down)

Silver dropped on Friday after the US refrained from putting import tariffs on critical minerals, but was still up 15% for the week on surging demand for precious metals.



Fund Flow Action

On January 14, the Foreign Institutional Investors (FIIs) offloaded equities worth around Rs 4781 crore, while Domestic Institutional Investors (DIIs) continued their buying as they bought equities worth Rs 5217 crore.



Hope you're all set for today's trade. We wish you a profitable day ahead.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

First Tick: Top global cues to watch in today’s trade

Auto sector to be a star performer this year, Banks look fundamentally healthier than in the past 15 years, Budget could push decisive reforms for labour-intensive industries and large-scale job creation

* Auto sector to be a star performer this year
* Banks look fundamentally healthier than in the past 15 years
* Budget could push decisive reforms for labour-intensive industries and large-scale job creation

shorts/business/daily-voice-auto-sector-to-be-star-performer-this-year-banks-look-fundamentally-healthier-than-in-the-past-15-years-says-anil-rego

* Auto sector to be a star performer this year
* Banks look fundamentally healthier than in the past 15 years
* Budget could push decisive reforms for labour-intensive industries and large-scale job creation

"The auto sector has a strong case to be a star performer this year, supported by a rare combination of healthy demand, operating leverage, and earnings momentum across segments, said Anil Rego, the Founder and Fund Manager at Right Horizons PMS in an interview to Moneycontrol.

He believes Indian bank balance sheets are indeed in their strongest position in well over a decade. "Overall, the sector looks fundamentally healthier than it has been in the last 15 years, and the outlook is positive, anchored more in earnings and balance-sheet strength than in short-term macro or rate-cycle optimism," he said.

In the Union Budget 2026, there could be a decisive push toward labour-intensive industries and large-scale job creation, aimed at strengthening India’s employment engine as growth broadens, said Anil Rego, the Founder and Fund Manager at Right Horizons PMS in an interview to Moneycontrol.

Will 2026 be a tough year for equity markets, largely due to global factors?

Recent US actions have added layers of global uncertainty. The escalation with Venezuela is fundamentally about oil leverage rather than ideology. While headline risks around seizures and sanctions can push oil prices higher in the short term, they do not materially alter global supply over the medium term. Markets are pricing risk premium, not an actual supply shock, keeping energy prices volatile but contained. For equity markets, this translates into intermittent inflation anxiety rather than a structural reset.

Similarly, renewed tensions with Iran, including the announcement of a 25% additional tariff on countries trading with Iran, are best viewed as pressure tactics. The objective is deterrence and negotiation leverage, not immediate enforcement at scale. Even if implemented selectively, India’s direct exposure is limited due to diversified crude sourcing and its relatively low trade dependence on Iran. The bigger impact is on sentiment and freight/logistics costs, not earnings trajectories.

On trade, the proposed 500% tariff legislation in the US has grabbed attention but remains a low-probability outcome. Historically, such extreme proposals struggle to pass due to Congressional checks, filibuster thresholds, business lobbies, and legal scrutiny. Markets tend to discount these as negotiating tools rather than executable policy. As a result, exporters may see near-term pressure, but broad-based earnings impact is unlikely.

The delay in the US–India trade deal adds to headline fatigue but has had limited market impact so far. Indian equities have shown that earnings, liquidity, and domestic growth matter more than trade rhetoric. India’s economy is far less export-dependent than many peers, and services exports remain resilient even amid goods-trade friction.

Do you think FIIs will stay away from Indian markets until earnings growth returns to the mid-teens?

FIIs are currently more driven by global allocation themes than just India-specific earnings, with flows chasing AI-linked markets, while recent US-related macro and geopolitical issues have also triggered risk-off selling across EMs. That said, this selling reflects global positioning and opportunity cost rather than a deterioration in India’s fundamentals.

India continues to remain relatively strong on domestic growth, policy support, and medium-term earnings visibility, and is already deeply under-owned after sustained foreign de-risking. As global headwinds fade, AI trade crowding normalises, and earnings recovery becomes more visible, FII flows are likely to return gradually well before earnings growth fully settles into the mid-teens.

What could be the worst-case scenario in an India–US trade deal?

The worst-case scenario for an India–US trade deal would be a prolonged delay or a narrow, incremental agreement that falls short of expectations, keeping select sectors exposed to tariff uncertainty and periodic headline risk.

However, even in this outcome, the macro impact on India is likely to remain contained given the economy’s low dependence on US exports, strong domestic demand, and policy support at home. Importantly, such delays would reflect negotiation complexity rather than a breakdown in relations, and history suggests these frictions tend to ease over time allowing markets to refocus on earnings, growth, and India’s longer-term strategic alignment with the US.

Do you believe the auto sector could be a star performer this year?

The auto sector has a strong case to be a star performer this year, supported by a rare combination of healthy demand, operating leverage, and earnings momentum across segments. Recent industry data shows broad-based volume growth across PVs, 2Ws, CVs and tractors, with demand sustaining even after the festive season, while earnings for OEMs and ancillaries are expected to grow in the mid-20% range on a YoY basis, aided by GST-related demand pickup, stable costs, and better capacity utilisation.

While valuations in parts of the sector are no longer cheap, the visibility on earnings, balance-sheet strength, and improving mix (SUVs, exports, premiumisation) suggests autos could continue to outperform the broader market, especially in an environment where investors are gravitating toward sectors with tangible earnings delivery rather than long-dated narratives.

What could be the biggest game-changer in the Union Budget?

There could be a decisive push toward labour-intensive industries and large-scale job creation, aimed at strengthening India’s employment engine as growth broadens. Expectations are centred on expanded MSME schemes and targeted support for sectors such as textiles, leather, footwear, gems &amp; jewellery, and handicrafts areas with high employment multipliers and deep linkages to rural and semi-urban India. This approach aligns with the rollout of the new labour codes, improved access to credit and infrastructure for mid-sized enterprises, and a gradual shift toward supply-side reforms.

If executed well, such a strategy can help India fully leverage its demographic dividend, avoid the middle-income trap, and lay the foundation for more inclusive, durable growth over the next decade, making it one of the most consequential Budgets from a long-term perspective.

Do you agree that bank balance sheets are at their strongest in the last 15 years? Are you bullish on the sector?

Indian bank balance sheets are indeed in their strongest position in well over a decade. Asset quality is benign, capital buffers are comfortable, and corporate deleveraging over the last 8–10 years has structurally reduced credit risk in the system.

What stands out in the current cycle is that banks are entering a phase of earnings acceleration from a position of strength rather than stress return on assets is at an inflection point, net interest margins are stabilising after the rate-cut impact, and credit costs remain contained.

According to recent sector analysis, profitability is expected to improve steadily over the next few years, with RoA expansion and operating leverage driving earnings growth, while valuations for many banks are still below long-term averages.

From a sector view, this creates a constructive medium-term setup rather than a euphoric one. The combination of strong balance sheets, improving return ratios, and potential loan growth recovery provides room for a valuation re-rating, especially as visibility on earnings improves. However, this is not a uniform story across all banks stock selection remains critical, with outcomes likely to diverge based on deposit franchises, underwriting discipline, and execution.

Overall, the sector looks fundamentally healthier than it has been in the last 15 years, and the outlook is positive, anchored more in earnings and balance-sheet strength than in short-term macro or rate-cycle optimism.

Is this a better time to invest in smaller NBFCs than in larger ones for healthier returns?

Smaller NBFCs can offer higher return potential than larger ones in this phase of the cycle, but the opportunity is far more selective than broad-based. Many smaller and mid-sized NBFCs are coming off a low base, operate in niche segments like MSME or small-ticket LAP, and can grow assets and earnings faster as funding costs ease and operating leverage kicks in. This is where healthy returns can be generated, especially when valuations still assume elevated risk and modest profitability. However, the dispersion within this bucket is wide execution quality, underwriting discipline, and management depth matter far more than size.

At the same time, the risk profile in smaller NBFCs is clearly higher. Ground-level evidence points to rising competition and risk-taking in segments like micro-LAP, along with higher employee attrition and early signs of stress in non-prime portfolios. Credit costs are likely to stay elevated in the near term, and weaker players may struggle as growth slows and asset quality normalises. Larger NBFCs, while offering lower upside, provide greater balance-sheet resilience, funding stability, and predictability of returns, but many already trade at valuations that discount these strengths.

In this environment, smaller NBFCs make sense only with strong selectivity where there is clear visibility on asset quality control, funding access, and a path to sustainable return ratios. It is not a blanket “small over large” call, but a case for focused exposure to well-run smaller franchises where growth and valuation asymmetry still exist, while avoiding those where growth is being chased at the cost of credit discipline.

Do you think GST rate cuts could be a pivot point for earnings growth from Q3 onwards?

GST rate cuts can act as a meaningful pivot point for earnings growth from Q3 onwards, though the impact is more sequential and structural. Historical evidence shows that GST rate rationalisation typically leads to a short-term adjustment phase, followed by stronger and more durable revenue growth as lower rates improve compliance, expand the tax base, and revive demand. Past episodes suggest an initial dip of around 3–4% in collections, but this is usually followed by sustained month-on-month growth of 5–6%, indicating that volume and compliance effects more than offset the rate reduction over time.

From a corporate earnings perspective, the transmission works through improved consumption, better pricing power in discretionary segments, and operating leverage kicking in as volumes recover. Lower GST rates also ease working-capital pressure and reduce compliance frictions, supporting margins rather than compressing them. Importantly, the fiscal framework cushions any revenue volatility for states, allowing policy continuity without tightening elsewhere in the economy, which reinforces the growth impulse.

Q3 should mark the beginning of an earnings inflection, with the more visible and broad-based impact emerging into Q4 and beyond as demand normalises and volume-led growth feeds into profits. In that sense, GST cuts are less a short-term stimulus and more a catalyst for a healthier, earnings-driven recovery cycle.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Daily Voice: Auto sector to be star performer this year; banks look fundamentally healthier than in the past 15 years, says Anil Rego

&quot;The auto sector has a strong case to be a star performer this year, supported by a rare combination of healthy demand, operating leverage, and earnings momentum across segments, said Anil Rego, the Founder and Fund Manager at Right Horizons PMS in an interview to Moneycontrol.

He believes Indian bank balance sheets are indeed in their strongest position in well over a decade. &quot;Overall, the sector looks fundamentally healthier than it has been in the last 15 years, and the outlook is positive, anchored more in earnings and balance-sheet strength than in short-term macro or rate-cycle optimism,&quot; he said.

In the Union Budget 2026, there could be a decisive push toward labour-intensive industries and large-scale job creation, aimed at strengthening India’s employment engine as growth broadens, said Anil Rego, the Founder and Fund Manager at Right Horizons PMS in an interview to Moneycontrol.

Will 2026 be a tough year for equity markets, largely due to global factors?

Recent US actions have added layers of global uncertainty. The escalation with Venezuela is fundamentally about oil leverage rather than ideology. While headline risks around seizures and sanctions can push oil prices higher in the short term, they do not materially alter global supply over the medium term. Markets are pricing risk premium, not an actual supply shock, keeping energy prices volatile but contained. For equity markets, this translates into intermittent inflation anxiety rather than a structural reset.

Similarly, renewed tensions with Iran, including the announcement of a 25% additional tariff on countries trading with Iran, are best viewed as pressure tactics. The objective is deterrence and negotiation leverage, not immediate enforcement at scale. Even if implemented selectively, India’s direct exposure is limited due to diversified crude sourcing and its relatively low trade dependence on Iran. The bigger impact is on sentiment and freight/logistics costs, not earnings trajectories.

On trade, the proposed 500% tariff legislation in the US has grabbed attention but remains a low-probability outcome. Historically, such extreme proposals struggle to pass due to Congressional checks, filibuster thresholds, business lobbies, and legal scrutiny. Markets tend to discount these as negotiating tools rather than executable policy. As a result, exporters may see near-term pressure, but broad-based earnings impact is unlikely.

The delay in the US–India trade deal adds to headline fatigue but has had limited market impact so far. Indian equities have shown that earnings, liquidity, and domestic growth matter more than trade rhetoric. India’s economy is far less export-dependent than many peers, and services exports remain resilient even amid goods-trade friction.

Do you think FIIs will stay away from Indian markets until earnings growth returns to the mid-teens?

FIIs are currently more driven by global allocation themes than just India-specific earnings, with flows chasing AI-linked markets, while recent US-related macro and geopolitical issues have also triggered risk-off selling across EMs. That said, this selling reflects global positioning and opportunity cost rather than a deterioration in India’s fundamentals.

India continues to remain relatively strong on domestic growth, policy support, and medium-term earnings visibility, and is already deeply under-owned after sustained foreign de-risking. As global headwinds fade, AI trade crowding normalises, and earnings recovery becomes more visible, FII flows are likely to return gradually well before earnings growth fully settles into the mid-teens.

What could be the worst-case scenario in an India–US trade deal?

The worst-case scenario for an India–US trade deal would be a prolonged delay or a narrow, incremental agreement that falls short of expectations, keeping select sectors exposed to tariff uncertainty and periodic headline risk.

However, even in this outcome, the macro impact on India is likely to remain contained given the economy’s low dependence on US exports, strong domestic demand, and policy support at home. Importantly, such delays would reflect negotiation complexity rather than a breakdown in relations, and history suggests these frictions tend to ease over time allowing markets to refocus on earnings, growth, and India’s longer-term strategic alignment with the US.

Do you believe the auto sector could be a star performer this year?

The auto sector has a strong case to be a star performer this year, supported by a rare combination of healthy demand, operating leverage, and earnings momentum across segments. Recent industry data shows broad-based volume growth across PVs, 2Ws, CVs and tractors, with demand sustaining even after the festive season, while earnings for OEMs and ancillaries are expected to grow in the mid-20% range on a YoY basis, aided by GST-related demand pickup, stable costs, and better capacity utilisation.

While valuations in parts of the sector are no longer cheap, the visibility on earnings, balance-sheet strength, and improving mix (SUVs, exports, premiumisation) suggests autos could continue to outperform the broader market, especially in an environment where investors are gravitating toward sectors with tangible earnings delivery rather than long-dated narratives.

What could be the biggest game-changer in the Union Budget?

There could be a decisive push toward labour-intensive industries and large-scale job creation, aimed at strengthening India’s employment engine as growth broadens. Expectations are centred on expanded MSME schemes and targeted support for sectors such as textiles, leather, footwear, gems &amp;amp; jewellery, and handicrafts areas with high employment multipliers and deep linkages to rural and semi-urban India. This approach aligns with the rollout of the new labour codes, improved access to credit and infrastructure for mid-sized enterprises, and a gradual shift toward supply-side reforms.

If executed well, such a strategy can help India fully leverage its demographic dividend, avoid the middle-income trap, and lay the foundation for more inclusive, durable growth over the next decade, making it one of the most consequential Budgets from a long-term perspective.

Do you agree that bank balance sheets are at their strongest in the last 15 years? Are you bullish on the sector?

Indian bank balance sheets are indeed in their strongest position in well over a decade. Asset quality is benign, capital buffers are comfortable, and corporate deleveraging over the last 8–10 years has structurally reduced credit risk in the system.

What stands out in the current cycle is that banks are entering a phase of earnings acceleration from a position of strength rather than stress return on assets is at an inflection point, net interest margins are stabilising after the rate-cut impact, and credit costs remain contained.

According to recent sector analysis, profitability is expected to improve steadily over the next few years, with RoA expansion and operating leverage driving earnings growth, while valuations for many banks are still below long-term averages.

From a sector view, this creates a constructive medium-term setup rather than a euphoric one. The combination of strong balance sheets, improving return ratios, and potential loan growth recovery provides room for a valuation re-rating, especially as visibility on earnings improves. However, this is not a uniform story across all banks stock selection remains critical, with outcomes likely to diverge based on deposit franchises, underwriting discipline, and execution.

Overall, the sector looks fundamentally healthier than it has been in the last 15 years, and the outlook is positive, anchored more in earnings and balance-sheet strength than in short-term macro or rate-cycle optimism.

Is this a better time to invest in smaller NBFCs than in larger ones for healthier returns?

Smaller NBFCs can offer higher return potential than larger ones in this phase of the cycle, but the opportunity is far more selective than broad-based. Many smaller and mid-sized NBFCs are coming off a low base, operate in niche segments like MSME or small-ticket LAP, and can grow assets and earnings faster as funding costs ease and operating leverage kicks in. This is where healthy returns can be generated, especially when valuations still assume elevated risk and modest profitability. However, the dispersion within this bucket is wide execution quality, underwriting discipline, and management depth matter far more than size.

At the same time, the risk profile in smaller NBFCs is clearly higher. Ground-level evidence points to rising competition and risk-taking in segments like micro-LAP, along with higher employee attrition and early signs of stress in non-prime portfolios. Credit costs are likely to stay elevated in the near term, and weaker players may struggle as growth slows and asset quality normalises. Larger NBFCs, while offering lower upside, provide greater balance-sheet resilience, funding stability, and predictability of returns, but many already trade at valuations that discount these strengths.

In this environment, smaller NBFCs make sense only with strong selectivity where there is clear visibility on asset quality control, funding access, and a path to sustainable return ratios. It is not a blanket “small over large” call, but a case for focused exposure to well-run smaller franchises where growth and valuation asymmetry still exist, while avoiding those where growth is being chased at the cost of credit discipline.

Do you think GST rate cuts could be a pivot point for earnings growth from Q3 onwards?

GST rate cuts can act as a meaningful pivot point for earnings growth from Q3 onwards, though the impact is more sequential and structural. Historical evidence shows that GST rate rationalisation typically leads to a short-term adjustment phase, followed by stronger and more durable revenue growth as lower rates improve compliance, expand the tax base, and revive demand. Past episodes suggest an initial dip of around 3–4% in collections, but this is usually followed by sustained month-on-month growth of 5–6%, indicating that volume and compliance effects more than offset the rate reduction over time.

From a corporate earnings perspective, the transmission works through improved consumption, better pricing power in discretionary segments, and operating leverage kicking in as volumes recover. Lower GST rates also ease working-capital pressure and reduce compliance frictions, supporting margins rather than compressing them. Importantly, the fiscal framework cushions any revenue volatility for states, allowing policy continuity without tightening elsewhere in the economy, which reinforces the growth impulse.

Q3 should mark the beginning of an earnings inflection, with the more visible and broad-based impact emerging into Q4 and beyond as demand normalises and volume-led growth feeds into profits. In that sense, GST cuts are less a short-term stimulus and more a catalyst for a healthier, earnings-driven recovery cycle.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

9 out of 17 years BSE FMCG has given negative returns in January.

Type	R1	R2	R3	PP	S1	S2	S3
Classic	19,191.31	19,311.76	19,380.96	19,122.11	19,001.66	18,932.46	18,812.01
Fibonacci	19,194.56	19,239.31	19,311.76	19,122.11	19,049.66	19,004.91	18,932.46
Camarilla	19,088.24	19,105.63	19,123.01	19,122.11	19,053.48	19,036.09	19,018.71

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