According to Anil Rego of Right Horizons PMS, global factors such as a weakening US dollar and easing trade tensions have enhanced the appeal of emerging markets like India. Additionally, the recent ceasefire between India and Pakistan has helped reduce geopolitical risk, providing a more favourable environment for foreign investors, he said in an interview to Moneycontrol.
Hence, though global uncertainties remain, the current trajectory suggests that FIIs are likely to continue investing in Indian equities in the near term, he believes.
According to the Founder & Fund Manager at Right Horizons PMS, if the truce holds and macro conditions remain stable, a 5–10 percent market rally in the coming weeks is plausible. However, sustained gains will depend on upcoming domestic earnings and global cues, he said.
Do you believe the bulls have gained significant strength and are now poised for a 5–10% rally, especially following the ceasefire between India and Pakistan?
The bulls appear to have regained strength, with the Nifty 50 and Sensex jumping over 3.5 percent on Monday after the ceasefire between India and Pakistan. The sharp recovery reflects easing geopolitical tensions, which had weighed heavily on sentiment last week. The rally in small- and mid-cap indices, along with falling volatility, suggests renewed investor confidence. Sectors like financials, IT, and tourism led the gains, reinforcing the broader market strength. If the truce holds and macro conditions remain stable, a 5–10 percent rally in the coming weeks is plausible. However, sustained gains will depend on upcoming domestic earnings and global cues.
After analyzing the inflows over the last four weeks, do you expect FIIs to continue investing in Indian equities in the coming months?
FIIs have shown renewed interest in Indian equities, and the trend appears likely to continue in the coming months. After being net sellers earlier in the year, FIIs turned net buyers in April 2025, investing over Rs 4,200 crore, followed by significant inflows of Rs 14,167 crore in early May. The positive momentum has been supported by strong domestic macroeconomic fundamentals, including projected GDP growth of 6.5 percent for FY26, and robust sectoral performance, particularly in banking and financial services, where FIIs have poured in over Rs 23,000 crore recently.
Global factors such as a weakening US dollar and easing trade tensions have also enhanced the appeal of emerging markets like India. Additionally, the recent ceasefire between India and Pakistan has helped reduce geopolitical risk, providing a more favourable environment for foreign investors. While global uncertainties remain, the current trajectory suggests that FIIs are likely to continue investing in Indian equities in the near term.
Do you strongly believe that private banks are attractively valued at current levels?
There is a strong case to be made that private sector banks in India are attractively valued at current levels. Despite solid fundamentals such as healthy capital adequacy, improving asset quality, and strong credit growth many leading private banks are still trading at relatively modest P/B valuations compared to historical averages.
For instance, large-cap private names have underperformed the broader market in recent quarters, leading to a valuation gap relative to their long-term growth potential. This underperformance, despite resilient earnings and expanding loan books, makes them appealing from a risk-reward standpoint.
Additionally, with macroeconomic tailwinds such as rising domestic consumption, sustained capex, and a likely peak in interest rates, private banks are well-positioned to benefit from the next leg of economic growth. Therefore, for long-term investors, the current valuations present a compelling opportunity to accumulate quality private banks.
Do you think the earnings season so far has been mixed, but not disappointing, and may be signaling healthy double-digit growth in FY26?
The earnings season so far can be characterized as mixed but not disappointing, and it does provide encouraging signals for healthy growth in FY26. While some sectors such as IT and FMCG have delivered subdued results due to global headwinds and rural demand weakness, the overall earnings trajectory has remained resilient, especially in domestic-facing sectors like banking, auto, infrastructure, and capital goods. Strong margin improvement, volume recovery, and operating leverage are evident in several companies, suggesting that underlying business fundamentals are strengthening.
Moreover, commentary from management teams across sectors has generally been constructive, with expectations of demand normalization, easing input cost pressures, and continued government capex. These trends support the view that Nifty 50 earnings could sustain or even accelerate into FY26, underpinned by a broadening recovery across the economy.
Which is the one sector you strongly recommend following the ongoing March quarter earnings season?
India's consumer discretionary sector demonstrated resilience, particularly in urban markets, with strong revenue growth driven by robust demand for value fashion, jewellery, and quick-service offerings. Margin improvement was supported by easing input costs and better operating leverage, while store expansions and premiumization strategies further bolstered performance.
Although rural demand remained subdued and elevated food prices weighed on overall consumption sentiment, the sector benefited from steady urban spending and recovery in discretionary categories. Despite some variability in results across sub-segments, the overall outlook remains positive, especially for companies with strong brand positioning, efficient cost structures, and focused growth strategies.
Do you consider the defence sector a tactical trade or a structural long-term opportunity?
The defence sector can be viewed as both a tactical trade and a structural long-term opportunity, depending on the investment horizon and specific dynamics you're considering.
Tactical trade: Short-term factors, such as geopolitical tensions, increased defense budgets, and government defense initiatives, can drive sector performance in the near term. In India, rising defense procurement by the government, particularly in light of recent global and regional uncertainties, has boosted defence stocks. The ongoing push for indigenization and the "Atmanirbhar Bharat" (initiative has created near-term opportunities for defense manufacturers.
Structural long-term opportunity: From a longer-term perspective, the Indian defense sector is poised for significant growth, driven by consistent government spending on defense modernization, an expanding defense export market, and the ongoing transformation in domestic defense capabilities. The government's focus on domestic manufacturing and the adoption of the defense production policy that emphasizes innovation, technology, and self-reliance will likely create sustained demand for Indian defense companies over the next decade.
So, while there may be tactical opportunities in response to current events, the sector holds significant long-term potential due to structural reforms, growing defense budgets, and a focus on indigenous manufacturing.
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.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
