Kush Gupta, Director at SKG Investments and Advisory, expects further rate hikes of 25 basis points each at upcoming monetary policy meetings.
However, reversing the entire 125-basis-point rate-cut cycle, which began with the policy rate at 6.5%, would require crude oil prices to remain above $95 per barrel and the US Federal Reserve to continue raising rates, he said in an interview with Moneycontrol.
According to Gupta, markets have priced in higher interest rates but have yet to factor in potential earnings downgrades. A sustained market rally would require crude oil prices to ease or corporate earnings to hold up in the coming quarters, he said.
At the sectoral level, SKG Investments and Advisory is selectively investing in IT companies with visible AI-related deal wins. However, the firm is avoiding broad-based exposure to the sector until there are clearer signs that earnings have bottomed out, Gupta said.
Do you think IT companies need to further recalibrate their AI-led growth strategies?