Amit Bivalkar, Head of Equirus Wealth, cautioned investors that while the US midterm elections could trigger a shift in market sentiment, they should not expect a lasting trend solely based on the election outcome. According to Bivalkar, inflation trends, interest rate expectations, corporate earnings, and geopolitical developments will continue to play a more significant role in shaping market dynamics.
Bivalkar expressed optimism about the telecom sector's medium-term prospects, citing rising data consumption, increasing digital adoption, and potential tariff hikes as key drivers for revenue growth. He noted that if pricing discipline is maintained and investment intensity moderates, the telecom sector could become a highly attractive cash-generating industry.
On the energy front, Bivalkar acknowledged that any easing of geopolitical tensions in West Asia would be positive for crude oil prices. However, he emphasized that forecasting the timing of such developments remains challenging. A meaningful decline in oil prices would require greater stability in global supply chains and energy flows, which would also impact India's inflation, fiscal balances, and corporate profitability.
Regarding the US Federal Reserve's interest rate policy, Bivalkar suggested that a rate hike in October is unlikely, but the December meeting could be a pivotal moment. He highlighted that the Fed's decisions will be data-dependent, with upcoming inflation, labor market, and growth indicators being crucial. Higher energy prices could further complicate the inflation outlook.