Earnings, FIIs, and Tariffs: Dilip Bhatt on the trio driving market sentiment
1/5
Market near all-time highs — But still lacks direction
"We are just 2% away from the all-time peak, yet the market seems to be craving a clear direction," says Dilip Bhatt in an interview to ET Now. While the market indicators on screen reflect optimism, the underlying fundamentals are not providing strong support at the moment. With tariff uncertainty still unresolved, clarity is lacking in terms of what's driving sustained growth.
2/5
Quarterly earnings may be a mixed bag
Dilip Bhatt anticipates the upcoming quarterly results to be uneven across sectors. Some segments might benefit from early demand (frontloading), while others could continue to lag. In this scenario, management commentaries will be crucial in giving direction and insight into sectoral health. Investors will be closely watching for early signs of fundamental improvement.
3/5
Liquidity is the driver — FIIs are the joker in the pack
Bhatt emphasizes that liquidity continues to fuel upward momentum in the market, but there's an unpredictable element — the behavior of Foreign Institutional Investors (FIIs). If FIIs pull back or remain inconsistent, markets could enter a consolidation phase. He does not foresee a sharp correction but suggests the market might move sideways until there is clearer fundamental support.
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4/5
FMCG – The star performer with tailwinds
Despite high valuations, which have always been a hallmark of the FMCG sector, Dilip Bhatt sees improving conditions. Volume growth appears to be returning, both in rural and urban areas — a shift from the muted growth seen in recent quarters. Additionally, with inflation easing, companies are poised to improve their EBITDA margins as not all of them are expected to pass on the benefits through price cuts.
5/5
FMCG outlook – Short-term momentum possible
Dilip Bhatt believes that the FMCG sector, having stayed quiet for some time, could now witness a revival. With improving fundamentals and supportive macro trends, there is a possibility of short-term momentum building over the next two to three quarters. For investors, this could present an opportunity to re-enter a defensives-led rally with reasonable near-term upside.