Dalal Street rallies on trade relief, but investors still cautious: Mint survey

Subscribe to enjoy similar stories. Just as nerves were fraying, a breakthrough in US-India trade negotiations offered domestic markets much-needed succour. Against this backdrop, Mint’s sixth quarterly market survey, conducted between 5 and 11 February, captured the precise moment when investor sentiment began to pivot.

Indian equities have staged a sharp relief rally, emerging as the world’s top-performing market in the past week, while foreign portfolio investors (FPIs) have turned net buyers after relentless selling through January. Whether that shift marks the start of a durable upcycle remains an open question. Can markets finally shake off volatility? And will the return of foreign capital prove sustainable? To assess the durability of the rebound, from earnings pressures to signals in precious metals, Mint surveyed 35 investment professionals, including fund managers, strategists, economists and research heads.

The consensus: sentiment is improving, but conviction remains tentative. A clear majority (85%) expect a cautious recovery in equities, arguing that markets have largely priced in the Union Budget, the EU trade agreement and the evolving US trade framework. Indian equities have gained 2% so far this month after falling a little over 3% in January.

Fundamentals will now drive the next leg, experts said. “Markets would be solely focused on corporate earnings recovery from here on," said Uttam Kumar Srimal, senior research analyst at Axis Securities. “Since (December-quarter) earnings have been mixed, recovery would be cautious." While only 6% foresee continued stagnation, another 6% anticipate an immediate bull run here after.