India’s next leg of rally: Quant MF predicts new all-time highs, launches innovative SMID long-short fund

This optimism comes despite the broader global landscape, which the note characterises as uncertain but resilient.

Indian equities are positioned to scale new all-time highs in the first quarter of Samvat 2082, according to Quant Mutual Fund’s latest monthly note, which maintains a strongly constructive outlook on domestic markets. The fund house expects the Nifty 50 and Bank Nifty to lead gains, supported by what it describes as India’s “strong and secular growth story.”

Quant Mutual Fund notes that its portfolios continue to lean toward large-cap stocks with strong liquidity, although exposure to select mid- and small-cap names has been increased across its equity and hybrid schemes. The note adds that the fund house remains positive on Infrastructure, Financial Services, Hotels & Hospitality, Pharmaceuticals, Consumption and Telecom, and has recently raised allocations to chosen NBFCs and public sector banks.

This optimism comes despite the broader global landscape, which the note characterises as uncertain but resilient. It points to declining oil prices, moderating geopolitical tensions and expectations of further US rate cuts as factors supporting global investor sentiment.

Indian equities held firm in October even as global markets posted mixed performance: the S&P 500 gained 2 per cent but retreated from recent highs, gold recovered 3 per cent after early declines, and Bitcoin staged a modest rebound.

This is in contrast to a global backdrop that remains mixed. Citing the IMF’s October update, CIO Sandeep Tandon in the note highlights that global growth is expected to reach 3.2 per cent in 2025 and 3.1 per cent in 2026, which is slightly higher than earlier estimates but still weak by historical standards. The Fund also notes WTO’s upward revision to 2025 trade growth, driven by U.S. inventory rebuilding and stronger AI-related exports, which contrasts with its sharply lower 2026 forecast amid tariff concerns. In the note, Tandon points to China’s seventh consecutive month of manufacturing contraction and the World Bank’s projection of continued commodity price declines as evidence that structural pressures persist across major economies.

The fund house also announced the launch of the QSIF Equity Ex-Top 100 Long-Short Fund, set to be India’s first SMID (Small & Mid Cap) long-short offering. The NFO closes on November 7, 2025. The note explains that the fund aims to bridge an important gap in the market by combining small- and mid-cap exposures within a single, actively managed framework, which is a structure not previously available to Indian investors. The note says the strategy will maintain a predominantly SMID orientation while retaining the flexibility to take unhedged short positions of up to 25 per cent in SMID stocks. Quant Mutual Fund believes this introduces a differentiated source of alpha and a more robust approach to managing downside risk. According to the note, the new strategy is intended to provide investors with a smarter, more flexible avenue to participate in India’s emerging growth cycle.