A combination of easing geopolitical tensions, resilient domestic markets and improving technical indicators has strengthened investor sentiment, with market veteran Gautam Shah from Goldilocks Global suggesting that Indian equities may be approaching a crucial turning point.
According to Shah, Indian markets demonstrated remarkable resilience during last week's bout of geopolitical uncertainty.
"I guess, we finally have light at the end of the tunnel and that is purely from a news flow and screen perspective. The market saw the lights last week because early last week we had some geopolitical volatility and while the global markets collapsed for the first time in many months, the Indian markets were quite resilient."
He noted that the Nifty quickly rebounded from the lower end of its trading range and is now approaching a critical technical threshold.
"India's underperformance versus the rest of the world, which has been there for almost 15 months, could be coming to an end. The final hurdle that the index needs to clear is 24,000. If this 24,000 gets cleared, over the next few months you could attempt going back to levels of 25,500."
However, Shah cautioned investors against expecting runaway gains from the benchmark index.
"Still, do not expect anything substantial for the Nifty because it will find a lot of headwinds and we still have a lot of local challenges to deal with in terms of AI disruption, valuations, etc. But I do believe that the bigger trade is in the broader market."
Banks Have Carried the Market, But Leadership May Shift
While banking stocks have provided critical support in recent weeks, Shah does not believe they alone can drive a sustained phase of outperformance for India.
"Had it not been for the banks in the last two weeks, we would have been in very difficult shape. Reliance refuses to participate and, till last Friday, was at a two-month low. IT has its own problems and is trying to rebound, but it is not able to."
Even as Bank Nifty scales fresh highs, Shah argues that investors should focus less on large-cap benchmarks and more on emerging opportunities within the broader market.
"Please do not focus on the Nifty and the top 100. I do not think there is any major opportunity there. There is a parallel bull market taking place while the Nifty and largecaps are going through a time correction, and that is really the writing on the wall."
Renewable Energy Remains a Structural Growth Story
Among the sectors Shah is most optimistic about is renewable energy and the broader power ecosystem.
Drawing parallels with the chemical sector rally of 2020-21, he said structural shifts can create widespread wealth creation across an entire industry.
"Power, energy and the renewable space represent a structural change. The government understands it, the market understands it, and recent geopolitics probably reinforces the need for this push."
He added: "Valuations are still comfortable. Fundamentally, the commentary from many of these companies has been phenomenal and there is a lot of headroom in terms of revenue and bottom-line growth. Honestly, among the top five to seven names, you could buy any of these stocks and they will be big winners."
Strong Conviction on Adani Group
Shah also reiterated his positive stance on companies within the Adani Group universe.
Using relative-strength analysis, he said the group has delivered a major technical breakout against broader market indices.
"When I compare the Adani Group versus the Nifty or the NSE 500, there is a massive breakout that took place a few months back. Thereafter, the move has been phenomenal."
He believes the group's businesses remain closely tied to India's long-term growth narrative.
"These are companies which are a proxy to the India story. You cannot ignore some of the top four or five Adani Group companies. We have been invested, we have been biased on this, and they will go on to do bigger things."
Pharma Rally Has More Room to Run
Despite concerns that investors may rotate toward higher-beta sectors after recent market optimism, Shah remains constructive on pharmaceuticals, healthcare and diagnostics.
"After a day like today, you may say that pharma is going to take a backseat because the market is moving into high beta once again, but I do not feel that way because India still has its own headwinds in terms of fundamentals."
He believes the sector's structural uptrend remains intact after a prolonged period of underperformance.
"The pharma and healthcare trend is here to stay. It is coming out of two years of no returns. I feel that this is a good place to stay committed even at today's prices and use today's dip as a buying opportunity."
According to Shah, healthcare stocks could significantly outperform benchmark indices over the medium term.
"This index will deliver 20%, while the Nifty might do high single digits, in my view. Pharma is a place where you need to stay invested."
Global Bull Market Still Intact
Beyond India, Shah remains optimistic on global equities, particularly due to the ongoing artificial intelligence-led investment cycle.
"Had it not been for the global bull market that we have been in for the last six months and the SIP money coming from disciplined Indian investors, we would have been in a very difficult space."
He expects global markets to remain supportive, highlighting opportunities across Asia, the US and Europe.
"I still feel that global markets will do well. The rest of Asia looks very interesting. US markets are at the forefront of the entire AI trade. European markets are doing well. So, the global bull market is here to stay."
Time to Look at Gold and Silver Again
Shah also sees renewed opportunity in precious metals after a lengthy correction.
"Gold and silver went through a large correction phase for the last six months. Both got to support levels last Friday. I think a bounce is coming."
He added that investors seeking diversification away from equities may find attractive risk-reward opportunities in bullion.
"The risk-reward is once again in favour of gold and silver investment. If you have any capital outside equity markets, please go out there and make commitments in gold and silver."
While optimism has returned to Dalal Street following easing geopolitical concerns, Shah's message remains clear that the next phase of wealth creation may not come from benchmark indices alone. Instead, he sees greater potential in smallcaps, microcaps, renewable energy, healthcare and select infrastructure-linked themes, while maintaining confidence in both precious metals and the broader global equity rally.
