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While recent months have been marked by an earnings slowdown and heavy foreign institutional investor (FII) selling—averaging around ₹4,000–5,000 crore daily—he believes the selling may be easing for some stocks.
In his view, the market has become a “game of expectations,” where stocks that fail to meet earnings targets are quickly penalised.
However, certain underperforming sectors, where expectations remain low, could surprise on the upside if performance improves.
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Paroda highlights the potential for a shift in India’s favour as US President-elect Donald Trump resumes his “America First” agenda, with a particular focus on renegotiating trade terms.
Trump’s stance could both benefit and challenge India and emerging markets.
While a higher US fiscal deficit may lead to a weaker dollar, which typically aids emerging markets, Trump’s trade policies may bring some headwinds.
However, Paroda considers this period a unique opportunity for India, as global supply chains look to diversify from China.
With Trump expected to reassess tariffs with China, India could see accelerated shifts in low-end manufacturing.
Strong relations between Trump and Indian Prime Minister Narendra Modi further position India to capitalise on this “once-in-a-generation” chance to solidify its manufacturing role on the global stage.
In terms of sectoral strategy, Paroda sees promise in private sector banks and the pharmaceutical industry.
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Private banks have underperformed relative to public sector banks, leaving room for growth as long as they meet earnings expectations.
Similarly, the pharmaceutical sector presents a defensive opportunity with stable valuations in a turbulent market.
Paroda cautions that selectivity will be crucial, as certain overvalued areas are now experiencing corrections.
For more details, watch the accompanying video
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