India–US trade deal may unlock next market rally as midcaps, smallcaps stay under pressure: Ambareesh Baliga

India’s markets may soon get the breakout trigger they’ve been waiting for—and it could come from the long-anticipated India–US trade treaty, says Ambareesh Baliga, Independent Market Analyst.

Speaking to ET Now, Baliga said the deal, expected in early December, may help the markets push past all-time highs and revive the beaten-down smallcap and midcap segments.

India–US trade pact the next big trigger

Baliga expects the treaty to be finalised within weeks, calling it the “one big catalyst” needed to revive sentiment. While frontline indices sit near record highs, portfolios—especially smallcaps and midcaps—have been posting steep drawdowns.


He believes the deal will unlock liquidity, reduce market fear, and spark a broad-based rebound.

“This is a buying opportunity in selective small and midcaps—look for companies that are truly undervalued, not just those that have fallen,” he said.

Autos remain top picks for next 1–2 quarters

Baliga maintains a strong bullish stance on the auto sector, especially after GST reductions boosted demand.

He expects robust momentum in the coming quarters and prefers:

• Passenger Vehicles (PVs), particularly lower-end models
• Maruti Suzuki at current levels
• Two-wheelers such as Hero MotoCorp and TVS Motor

These segments, he says, are seeing sustainable demand recovery.

Real estate shows signs of revival after a brief slowdown

Though the realty index underperformed last month, Baliga sees sales picking up again following extended monsoon disruptions.

He notes that the Navi Mumbai region—especially areas near the new international airport—is witnessing the strongest traction.

Top picks:

• Godrej Properties for pan-India and Mumbai exposure
• Arihant Superstructures for pure-play Navi Mumbai potential

He expects momentum to strengthen as developers expand aggressively into new micro-markets.

Smallcaps & midcaps: Buy selectively into weakness

Baliga emphasises that the pain in smaller market segments is largely liquidity-driven and should reverse once foreign inflows return after the trade deal.

The strategy now, he says, is to stick to high-conviction names, avvoid “fallen-just-because-they-fell” stocks and accumulate undervalued growth stories ahead of the rebound