'Caution: name of the game in Indian markets'

Donald Trump's tariffs on Indian goods have kept markets uneasy. Manishi Raychaudhuri, chief executive officer of Emmer Capital Partners, tells Puneet Wadhwa in an email interview that the Indian market may derate further over the next quarter or two. Edited excerpts:

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How should investors approach the equity markets given the tariff developments?

US President Donald Trump's tariff announcement on India is a clear dampener to sentiment, especially since many Asian peers like South Korea, Indonesia, Japan, and Vietnam secured reduced tariffs. On the surface, sectors such as textile and garment, pharmaceutical, electronics, automotive, and machinery component appear most vulnerable.

That said, many details, such as sectoral exemptions, remain unclear, and trade negotiations are progressing. A more definitive assessment of the impact on trade and growth will only be possible later. For now, caution is the name of the game in Indian markets.

When do you expect the markets to break out of this rangebound movement, and what will drive the shift?

The Indian stock markets' rangebound movement reflects uncertainty around the "micro" factors: concerns over the earnings season and persistently declining consensus earnings forecasts across most sectors.