THESE 4 sectors may outperform broader market in coming months: Expert view

As global markets reel from a fresh wave of volatility, comparisons are being drawn to the steep market crashes of 2008 and 2020. However, experts believe the current scenario is less a warning of collapse and more an opportunity for investors to recalibrate.

Devender Singhal, a prominent market analyst, said that historically, market downturns have often paved the way for stronger and more sustained rallies. "If you look at the long-term market journey, all falls eventually appear as great entry points. This time is no different," he said.

Singhal noted that India, despite being impacted by global uncertainty—especially in light of trade tensions with the US—remains better positioned than many other emerging markets. “There’s still optimism around India. Our decline hasn’t mirrored the scale seen in other markets. Investors are hopeful that upcoming trade negotiations may result in more favourable terms for India,” he added.

That optimism, Singhal said, is rooted in India's strong fundamentals and potential to capture global export share—particularly in the US market—if trade terms improve. However, he cautioned that the road ahead will remain bumpy for the next two to three months as policy uncertainty and global inflation concerns persist.

Financial services could outperform banks

Speaking on sectoral trends, Singhal acknowledged that financials continue to be a preferred space for long-term investors. However, he noted a slight caution toward banking stocks due to expected pressure on Net Interest Margins (NIMs). “While we are positive on banks, our current stance is slightly underweight. We prefer diversified financial services where earnings visibility appears stronger at this juncture,” he said.

Focus on domestic consumption plays

On the consumption front, Singhal highlighted the mixed impact of global volatility. Sectors like pharma and automobiles, which are deeply integrated with global markets, may experience headwinds. However, he maintained that domestic-facing companies, particularly in discretionary consumption, could benefit from recent tax relief measures and stable inflation.

“With energy prices cooling and food inflation under control, the Indian consumption story has room to grow. Discretionary spending is likely to outperform staples,” he said. The April 1 tax relief is expected to inject more disposable income into the system, fueling consumer demand in select categories.

Inflation: India vs global trends

Despite growing fears of global inflation, Singhal differentiated between inflationary triggers in India and those in developed economies. “India's inflation is more sensitive to food and energy. As crude prices stabilize and rupee remains steady, the outlook for Indian consumers is not as bleak,” he pointed out.

Where else should investors look?

Looking beyond consumption and financials, Singhal identified a few sectors with strong earnings visibility. “Telecom services, healthcare, and discretionary consumption are sectors where earnings growth is likely to outpace the broader market. These should recover faster and carry lower downside risk,” he said.