Expert view: Divam Sharma, co-founder and fund manager at Green Portfolio PMS, believes the equity benchmark Nifty 50 may not remain below the 26,000-mark for a prolonged period, as there are significant tailwinds for equities. In an interview with Mint, Sharma shared his views on the Q2 results as well as the steep rise in gold this year. Here are edited excerpts of the interview:
The market looks torn between domestic tailwinds and global headwinds. How should investors navigate this uncertainty?
Markets are currently split between strong domestic momentum and global uncertainty. In times like these, diversification becomes essential; having some exposure to commodities can help balance the risks.
Manufacturing that is driven mostly by domestic demand looks relatively better placed, as it’s less affected by global politics and the ongoing shifts brought by AI compared to many service industries.
Investors should also keep an eye on how geopolitical events play out over the long run and stay ready with enough liquidity.
Having some money parked in liquid funds can give you the flexibility to act quickly when opportunities arise.
Can Nifty 50 remain below 26,000 by the end of the year?
We don’t expect the Nifty to stay below 26,000 for long; there’s room for an upside from here.
With inflation gradually cooling off, interest rates are likely to ease, and that should act as a strong tailwind for equities.
The rise of AI is also contributing to productivity gains and helping keep inflation in check.
Liquidity continues to find its way into markets through mutual funds, and global flows from regions like Japan, the UK, and the UAE are expected to stay strong.
Rising NRI participation, along with reverse migration and portfolio diversification, should further support inflows into India.
What are your expectations for Q2 earnings? Should we expect signs of earnings revival in key sectors such as financials and IT?
We believe the earnings recovery might take a few more quarters to show meaningful improvement.
As a fund, we typically stay away from broader sectors, such as financials and IT, as they don’t align with our focus on niche, high-conviction opportunities.
That said, the IT recovery is likely to remain uneven; nearly 95 per cent of India’s IT revenue is tied to overseas clients, which makes the sector vulnerable to global geopolitical shifts and spending cycles.
While select companies could surprise on margins, overall sectoral growth may stay muted until external conditions stabilise.
What is driving gold’s steep rise this year? Are rising gold prices impacting investor sentiment and capital flows to equity markets?
Gold’s sharp rally this year has been driven largely by central banks steadily increasing their reserves, signalling a gradual shift in how global finance is being reshaped.
Many nations are looking to diversify away from the dollar, and gold remains the most trusted store of value in uncertain times. On the retail side, every spike in geopolitical tension tends to prompt investors to turn to gold as a safe-haven asset.
While short-term flows may move away from equities when gold prices rise sharply, we haven’t seen long-term capital leaving growth assets.
For most investors, gold now complements equity exposure rather than replacing it, offering stability in an otherwise unpredictable global environment.
What are Green Portfolio’s Samvat 2082 recommendations?
Our Samvat 2082 portfolio is built around balance, combining the timeless strength of precious metals with India’s growing manufacturing story.
Gold and silver ETFs form the stabilising core of the portfolio, acting as natural hedges during market volatility while offering digital ease and liquidity.
Around this foundation, we’ve added select manufacturing-led businesses that reflect India’s shift toward self-reliance and global competitiveness.
Kalyani Steels, for instance, is setting up India’s first titanium alloy plant for jet engines – a milestone for the defence ecosystem.
DCX Systems is advancing up the value chain with radar and high-margin aerospace components in partnership with global leaders, such as ELTA.
Meanwhile, Thirumalai Chemicals’ US foray into food speciality chemicals positions it well in the global manufacturing reshuffle. Together, these elements create a portfolio that’s diversified, forward-looking, and deeply rooted in India’s growth journey.
How do you see the growing focus on ESG investing? Is it reshaping how investors assess long-term value and risks in Indian equities?
ESG investing is gradually becoming a stronger theme in India, especially as domestic regulations and reporting standards evolve.
The government’s increasing focus on sustainability, along with the expected rollout of a carbon credit policy, should give further direction to this shift.
As global supply chains localise and resources become more constrained, companies that integrate ESG principles early will likely have a long-term edge.
We believe that the coming years will see ESG evolve from a compliance exercise to a core part of how investors assess resilience, value creation, and risk in Indian equities.
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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of the expert, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
