Indian equities remain attractive over longer term amid strong earnings, private capex: Report
New Delhi, Aug 10
Indian equities remain constructive over the longer term, supported by corporate earnings recovery, private capex and potential trade deals, a report said on Monday.
The report from HSBC Mutual Fund said India's investment cycle is expected to be on a medium‑term uptrend driven by government infrastructure spending, manufacturing support and a pickup in private investments.
The announcements of potential trade deals with the EU and the US should support exports, while corporate earnings recovery continues, with strong first‑quarter FY27 results to date.
"Nifty valuations are now in-line with the 10-year average. Near-term outlook is now also improving assuming no re-escalation of geo-political conflicts," the fund house said.
In fixed income, the firm sees opportunities across short‑duration, banking and PSU debt and corporate bond funds depending on investment horizons.
In equity markets, IT, real estate and automobiles were among the best-performing sectors during July.
Healthcare also outperformed Nifty, while metals, FMCG, infrastructure, banks, telecom underperformed Nifty. Utilities, energy and industrials were the worst performing sectors.
Indian equities ended July with a 2.2 per cent gain, despite volatility arising from geopolitical tensions, crude oil movements and corporate earnings.
The broader market was also in-line with Midcap Index up 1.8 per cent and Smallcap Index - up 2.5 per cent for the month.
India recorded $2.5 billion in FII inflows in July, while DII inflows remained positive at $3.7 billion, supported by steady SIP and insurance flows.
The cumulative rainfall in India was 40 per cent below long-period average at the end of June 2026 but has now recovered to 12 per cent below average at the end of July 2026.
Due to the IMD's outlook of a below-normal monsoon for August, the firm remains watchful for further cues.
The RBI maintained the repo rate at 5.25 per cent with a neutral stance, while GDP growth was revised marginally higher to 6.7 per cent and inflation forecast lower to 5.0 per cent for FY27.
— IANS
Reader Comments
As a retail investor, I've been putting money into SIPs for years. It's reassuring to see DII inflows staying positive at $3.7 billion. Slow and steady wins the race, especially with the monsoon recovering to just 12% below average. 🌧️
The infrastructure push and manufacturing support are finally showing results. Private capex picking up is the key driver we needed. But I wish the report addressed the below-normal monsoon more seriously—agriculture still employs a huge chunk of our workforce. 🌾
Interesting insights. The FII inflows of $2.5 billion in July show foreign investors are still bullish on India despite global volatility. The valuation normalization to the 10-year average makes it a fair entry point for long-term investors.
Healthcare and IT doing well makes sense—consistent performers. But metals and infrastructure underperforming is concerning if we're relying on capex for growth. Let's hope the Q1 FY27 earnings trend continues for the rest of the year. Fingers crossed! 🤞
I appreciate the balanced view, but the RBI keeping rates at 5.25% with a neutral stance feels a bit too cautious. With inflation forecast lowered to 5.0%, there's room for a more accommodative policy to boost consumption. Hope they act in the next review.
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.