Markets Continue to Ignore Impending Risks

Actual earnings slowdown, which is now well into its sixth quarter, says Pramod Gubbi, cofounder at Marcellus Investment Managers, in an email interview with Puneet Wadhwa. Edited excerpts: Q&A Markets have been anything but discerning, ignoring even the

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How are the markets interpreting recent policy developments, especially on the tariff front?

■ S&P Global Ratings' upgrade reflects long-term stability, but investors had already priced it in, given the narrow India-US yield gap. Tariffs are negative, though India is less export-reliant than other emerging markets. Hopes of India emerging as a manufacturing hub are therefore tempered. Goods and services tax cuts are positive, offering a boost to consumption—our key growth driver that has slowed recently.

That said, the markets have been anything but discerning, ignoring even the actual earnings slowdown, which is now well into its sixth quarter. The argument that markets are forward-looking falls short, as they continue to ignore impending risks.

The incremental buyer in the market is primarily the retail investor—either directly or via mutual funds (MFs)—which makes the market even less reflective of these events in reality.

Can tough market conditions trigger a consolidation phase for broking and wealth management?

■ Setting aside the impact of futures and options regulatory changes for brokers, the environment remains buoyant for all capital market players. Wealth management, in particular, is

Steady hands in shaky markets