Markets have moved on from geopolitics, broader rally underway: Anurag Singh
Investor sentiment is stabilizing, shifting focus from dominant tech stocks to broader market participation. Anurag Singh of Ansid Capital highlights market resilience despite geopolitical tensions, noting a move beyond Iran concerns and a potential shift away from the 'Magnificent Seven' towards a more diversified rally.
As global markets navigate geopolitical tensions and shifting investment trends, investor sentiment appears to be stabilizing, with a growing focus on broader market participation rather than a handful of dominant tech stocks.
In a conversation with ET Now, Anurag Singh, Managing Partner, Ansid Capital shared his outlook on the US and Indian markets, highlighting resilience despite uncertainty and evolving investment themes.
Markets Move Beyond Iran Concerns
Addressing the recent volatility, Singh noted that markets have largely absorbed geopolitical shocks.
"We pretty much saw the bottom last month, somewhere at the end of March. And now the markets have really moved on from the Iranian trouble. I understand oil is yet to cool down, and the cost of delivery is even higher than what we see in the futures, but the market senses that the US is not willing to escalate this any further."
He pointed out that the US currently holds a strategic advantage in the region, which has reduced fears of prolonged disruption.
"The US has a strong hand because it has now nearly captured the strait, at least on the exit side, which means Iranian revenues are dropping. They will not be able to sell oil or import other commodities into the country, which puts them in a weaker position."
However, Singh also flagged uncertainty around Iran's leadership.
"The sense is we do not know who is in charge in Iran, and that is the bigger trouble. Earlier it was the Ayatollah, but now he is not saying anything. We only hear from a couple of people from Iran. There is an absolute blackout, so we do not know what the people of Iran think."
Despite these concerns, markets have continued their upward trajectory.
"US investment banks have raised projections to about 7200 to 7600 for the S&P this year. Earnings are solid… so yes, everything looks good."
Shift Away from 'Magnificent Seven'
Singh emphasized a structural shift in global equities. "The last two, three, four years have been all about the Mag-7. That may not turn out as good. Over the last six months to one year, we have seen that the Mag-7 have been all over the place."
Instead, a broader rally is emerging. "It is the broader rally outside of the Mag-7 which is actually good. Broadening of the market is always positive."
India's Position in Global Flows
On whether India could benefit from global capital rotation, Singh dismissed the idea of a strong "anti-AI trade."
"I do not believe so much in the anti-AI trade. I do not think that is happening. AI trade in Korea and Taiwan continues to propel forward."
However, he acknowledged that India's weight in global indices is stabilizing.
"India was at 9% weightage in MSCI before 2020, then peaked at 20%, and now it is back to around 14%. Much of this selling is broadly done."
He expects foreign outflows to ease but urged policymakers to remain proactive.
"The government really needs to do something here. This attitude towards foreign capital — that we do not need them — is a bit overdone. They have a much bigger role to play."
Earnings Outlook: Tempered Expectations
Singh remained cautious about earnings projections, citing historical overestimation.
"Earnings projections always start at 15% and then drop to single digits. I have seen this pattern before, and I see some of that even now."
He warned that near-term pressures, especially from energy costs, could weigh on results.
"Do not look at this quarter and the next one — that is kind of a washout. But after that, once oil settles down, I hope 10% to 12% earnings growth from India should come in."
Betting on Largecap IT
Singh identified largecap IT as a key opportunity.
"Largecap IT — absolutely. At 4200, everyone was buying TCS. Now everyone is saying we should sell it. I think this is the right time."
He acknowledged valuation gaps but still sees value.
"TCS' market cap is roughly equal to Accenture, whereas its revenue is half. But that is the Indian arbitrage. All said and done, these are fine levels to buy."
Banks also appear attractive, though he remains selective.
"Banks have not been working, but they are reasonably priced. I am not too gung-ho on energy or power — they get overpriced very quickly."
AI Impact: Opportunity, Not Threat
On artificial intelligence, Singh struck a balanced tone.
"The only objection on IT was valuations. Earlier, TCS and Infosys were available at 16 to 19 multiples, then went up to 40 plus. Now they are back at 16 to 18."
He sees current pessimism as an opportunity.
"I like the absolute consensus in India that these companies are going to die out. I love that situation. This is the only sector at value in India currently."
While not expecting explosive growth, he expects steady returns.
"Do not expect magic, but good solid dividend-driven companies with 10% to 12% growth in price — not bad."
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