Stocks to Buy | Understanding the Calm: Ashish Gupta on why markets aren't reacting to global geopolitical noise - Market's calm amid tension | The Economic Times
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Ashish Gupta in an interview to ET Now explained that despite rising geopolitical tension, the market has reacted in a mature and composed manner. This is largely due to the government's clarification that the recent move was non-escalatory.
Moreover, uncertainty had already been building up, and the market was not reacting to several positive macroeconomic indicators. The earnings season so far has met muted expectations, which has also helped prevent panic selling.
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Gupta emphasized that India's macroeconomic fundamentals are strong, which is providing stability during uncertain times. The currency has remained stable, and interest rates have come down significantly thanks to the RBI's liquidity management. On the fiscal front, strong GST collections and lower oil prices have improved government revenues. This overall macro stability is giving investors confidence, even amid geopolitical noise.
IANS
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Reflecting on previous similar events in 2016 and 2019, Gupta pointed out that the market tends to quickly move on if there is no escalation. In both past instances, the market experienced only low single-digit drawdowns. If current tensions do not worsen in the next 24–48 hours, it’s likely that this episode will also fade from investor concern.
TIL Creatives
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When asked about divergent performances among banks, Gupta explained that while asset quality has remained strong across the board, differences in margins and growth have created contrasting results. Public sector banks have seen some margin compression, while private banks, particularly ICICI, have outperformed expectations. This divergence is largely due to better funding cost management in private banks.
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Gupta expressed optimism about a pickup in credit growth in the second half of FY26. The recent change in the RBI’s stance, along with deposit rate cuts by private banks, is expected to ease funding costs. This should help maintain margins and support continued growth, especially among well-managed private banks.
IANS
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On the topic of defence stocks, Gupta advised caution. While the sector’s fundamentals are strong with full order books, the recent geopolitical event is unlikely to materially change the outlook in the short term. He cautioned against reacting to sentiment-driven headlines, pointing out that most Indian defence companies lack the export exposure necessary to benefit from rising global military spending, especially in Europe.
IANS
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According to Gupta, the biggest variable influencing the market this year will be the direction of the U.S. dollar. A weaker dollar has historically encouraged foreign institutional flows into emerging markets like India. Interestingly, despite rising U.S. bond yields due to tariff concerns, the dollar has weakened recently, which helped attract foreign inflows. Therefore, the dollar's trajectory will be crucial in determining market volatility and sentiment.
ETMarkets.com
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Beyond banking, Gupta highlighted sectors that could deliver strong returns over the next three years. He sees early signs of recovery in certain pockets of consumption and has become more constructive on the construction sector. The EMS (Electronics Manufacturing Services) sector also holds promise, driven by global supply chain shifts away from China. Additionally, he remains positive on travel, hospitality, and real estate due to sustained demand trends.
Ashish Gupta believes that the market's composed reaction to geopolitical developments reflects its confidence in India’s macro fundamentals. Strong economic indicators, stable banks, and selective sector opportunities all support a constructive outlook. He advises investors to focus on long-term drivers like corporate earnings, the dollar's direction, and structural sectoral growth rather than short-term noise.
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