Daily Voice: Nifty at 28,000? This fund manager says it’s likely if corporate profits rise

Tesla’s entry will undoubtedly accelerate India’s EV transition, raising customer expectations around technology, charging infrastructure, and range. However, incumbent automakers have already begun scaling EV platforms and forging local partnerships to contain costs.

In the near term, Tesla may command premium margins and brand appeal, but Indian OEMs' deep dealer networks, pricing discipline, and cost structures should help them defend volume and market share in their respective segments.

Do you expect the two-wheeler industry to witness a strong recovery from the upcoming festive season, potentially outperforming passenger and commercial vehicles?

Two-wheeler sales have historically been among the first to rebound during festive seasons, driven by first-time buyers and strong demand in semi-urban and rural areas, affordable financing schemes, low entry-level pricing, and improved dealer outreach give two-wheelers an edge over costlier passenger vehicles (PVs) and capital-intensive commercial vehicles (CVs).

In addition, recent rural income growth, supported by favourable monsoon forecasts and government spending on agriculture, should lift demand for motorcycles and scooters, OEM promotions, such as bundled insurance, extended warranties, and no-cost EMI offers, further sweeten the proposition for buyers looking to replace aging models or purchase a second vehicle.

By contrast, PV demand often depends on urban income growth and consumer sentiment, while CV orders hinge on broader industrial activity and fleet replacement cycles, both of which tend to recover more gradually. That said, pent-up demand in the PV segment and fleet restocking by logistics companies could narrow the gap later in the year, especially if semiconductor supply tightens or commodity costs spike, overall, two-wheelers look set to lead the festive recovery, but sustained outperformance will hinge on rural discretionary spending and financing availability remaining robust.

Given the favourable trends in inflation, interest rates, and tax cuts, are you anticipating the Nifty to reach 27,000–28,000 in the second half of FY26?

The combination of easing CPI, a neutral to accommodative RBI stance, and recent corporate tax incentives creates a supportive backdrop. If earnings growth comes at mid-teens (driven by cyclical recovery in industrials and resilient performance in IT and consumer sectors) and valuations remain near historical averages, a Nifty range of 27,000 to 28,000 by H2 FY26 is plausible, with key risks including geopolitical shocks or a sharper-than-expected slowdown in global demand.

In your view, has the US dollar index bottomed out?

After a multi-year strengthening cycle, the US dollar index has retraced much of its peak gains as the Federal Reserve signals a more balanced approach to monetary policy, real interest rate differentials between the US and other major economies have narrowed, and renewed risk-on sentiment in global equities markets has weighed on safe-haven demand for dollars.

In addition, signs of moderating US economic growth, particularly in manufacturing and capex, suggest that the dollar may remain rangebound rather than resume a steep uptrend, that said, a decisive pivot to rate cuts by the Fed would be needed to trigger a sustained weakening beyond minor pullbacks.

Absence of clear guidance on policy easing and given the dollar’s role as the world’s primary reserve currency, we see limited room for further depreciation, any additional downside is likely to be modest, perhaps in the order of 3–5 percent from current levels, and could be offset by periodic bouts of dollar strength driven by geopolitical tensions or risk aversion. Therefore, while near-term rallies in risk assets may push the dollar slightly lower, we believe it has reached the lower bounds of its trading range until a definitive shift in Fed policy emerges.

Do you still foresee a potential economic slowdown, but not a full-blown recession, in the United States, particularly in light of the proposed Trump tariffs?

We expect a mild slowdown in US growth, driven by softer consumer spending and corporate capex, but not a deep recession. The proposed tariffs on China and allies introduce policy uncertainty and could squeeze margins in select sectors, yet tight labour markets and resilient service-sector activity should avert a sharp contraction, so a “soft landing” remains our base case.

Do you maintain a bullish outlook on gold for the rest of the financial year, considering the current global environment and volatility stemming from Trump’s tariff policies?

We remain broadly constructive on gold given a convergence of factors that tend to support bullion under stress. First, escalating tariff rhetoric and trade uncertainty increase demand for safe havens as investors seek portfolio ballast, and history shows gold typically rallies during such episodes.

Second, the US fiscal deficit has ballooned, driving Treasury issuance higher, and with 30-year yields recently touching 5.044 percent, the highest in nearly 18 years, real yields remain under pressure once inflation is factored in, enhancing gold’s appeal as a non-yielding asset.

Third, signs of an impending slowdown or mild recession in major economies, coupled with sticky core inflation, create a stagflation risk environment in which gold has outperformed equities and bonds in past cycles.

Finally, central banks across emerging and developed markets continue to add to reserves as a diversification play, underpinning structural demand. While short-term corrections can occur on profit-taking or dollar strength, our multifaceted bullish case, with drivers spanning monetary, fiscal, and geopolitical domains, suggests that gold is well poised to outperform over the remainder of the financial year.

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