“It’s a game of expectations… if companies meet or beat expectations, your valuations continue to be rewarded,” Prashant Paroda, Portfolio Manager–Emerging Markets at Allspring Global Investments, a US-based firm that had over $457 billion worth of financial assets under management at the end of December 2025. Essentially, some of the rally is driven by hope of an earnings recovery.
Inflation has cooled off, thanks to a sharp fall in crude oil prices, and foreign investors have pumped in more money into the Indian stock market. Paroda believes private banks will benefit from better credit growth and cement makers will see their costs ease. The ‘two-and-a-half player’ telecom space is a good bet, he added.
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The Nifty50 is up over 5.5% this year so far compared to the less than 3.5% rally in the Shanghai Composite, largely because the intense trade war between Donald Trump’s US and Xi Jinping’s China. Will this reverse with an apparent thaw between the two sides?
“I don’t think India needs to worry… it makes sense for the two democracies to pencil in this trade deal,” Paroda said said. According to him, ‘there’s no alternative’ other than India for investors looking for stability, even if the valuations are too high.
Also Read: Geopolitical jitters offer buying opportunity, say top fund managers
For the entire interview, watch the accompanying video
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(Edited by : Sriram Iyer)
