‘I’d call India a rather boring mkt this year’

With Indian markets yet to hit new highs in 2025, Mark Matthews, managing director and head of research for Asia at Julius Baer, tells Puneet Wadhwa in a fireside chat that India remains the only essential emerging market (EM) for global portfolios. He believes India’s two big strengths are its demographics and jugaad — the “can-do” spirit. Edited excerpts:

- 

(PHOTOS: KAMLESH PEDNEKAR)

How do you assess the year 2025 for global financial markets, excluding India?

■ In one word — surprising. Truth be told, if you had asked me in January 2025 how global markets would perform this year, I would have said there was over a 50 per cent chance they would be down. Yet here we are, with the bellwether S&P 500 up 17 per cent — well above the long-term average.

What’s even more striking is that EMs as a whole are up over 30 per cent. It’s been a surprising year, and that makes me a bit uneasy about forecasting the next one.

‘The US markets have made consistent highs through 2025, while Indian markets have done so just once at the benchmark level. Would you say Indian markets have decoupled from the US?

■ No. The Nifty is up 6-7 per cent in US dollar terms — a perfectly decent return. Annualised, that’s 11-12 per cent. India hasn’t gone down; it’s simply underperformed the US and other EMs.

There are two key reasons for this. First, China. A year ago, Indian fund managers feared that China might become investable again — and it has. Second, corporate earnings in India have disappointed but now appear close to an inflexion point.