Global Uncertainty Will Likely Delay a Complete Return to Normalcy

We focus on distinguishing between temporary losses and permanent capital erosion. Neelesh Surana, CIO, Mirae Asset Investment Managers (India)

- Dipti Sharma

Neelesh Surana, chief investment officer at Mirae Asset Investment Managers (India), said the domestic economy is improving, particularly from the rural revival and supportive fiscal and monetary measures. However, global uncertainty will likely delay a complete return to normalcy, he added.

"A meaningful recovery depends on earnings growth, and we expect earnings to gradually improve over the next few quarters," Surana said.

In an interview with Mint, he also said new investors could look at hybrid funds to ride out volatility while gaining equity exposure, adding that staying focused on quality, diversifying through asset allocation, and not panicking during market swings is key.

Edited excerpts:

What is your current read on the markets? Have we seen the worst of it, or is there more pain or a phase of consolidation on the cards?

The recent correction was triggered by tariff developments, but it is essential to consider the broader context. Valuations had risen ahead of earnings during the strong market rally from March 2023 to September 2024.

This, coupled with a cyclical slowdown in the Indian economy and selling by foreign institutional investors (FIIs) and promoters led to the correction, which was further impacted by ongoing tariff uncertainty.

As far as tariffs are concerned, India's modest export exposure to the US (2% of GDP) and its resilient, consumption-led economy provide some comfort.