Best to go with Barbell strategy of investment in US as well as India: Santosh Rao

economictimes.indiatimes.com:

Santosh Rao, Head of Research & Partner, Manhattan Venture Partners, says they are doing a barbell strategy in the US where there is technology on one hand because that continues to be a growth strategy and AI is the growth engine and on the other hand, in anticipation of a recovering economy and pro-growth strategies, they are going with cyclicals such as financials and industrials and materials.
Rao says a similar strategy applies in India as well and one should stay with high-quality names. There is no room for speculation. Technology is not that big a factor, but pharmaceuticals and industrials are.
The rupee has largely been range-bound in the past year and that hovered between Rs 83 and 84 to the dollar. In fact, many emerging markets' currencies were losing ground. There are several reasons behind the recent depreciation that we have seen in the rupee like FII outflows and stronger dollar on the back of Trump 2.0 trade deficit. What is the biggest reason that is driving the rupee down and how critical are these levels in the rupee trade?
Santosh Rao: I agree with all the reasons you gave. So, the incremental news in the last few days is the new narrative building that the Fed may not cut rates as aggressively as thought, which is keeping the 10-year yield up and that is keeping the dollar strong and that is going to weigh on most of the emerging market currencies, and also India. That is a big part and an incremental development since the last few weeks.

Overall, the Trump strength is playing into that. The