NewsGlobalGlobal Markets Find Stability in Geopolitical Clarity While India Valuations Concern Foreign InvestorsGlobal Markets Find Stability in Geopolitical Clarity While India Valuations Concern Foreign Investors
Anurag Singh of Ansid Capital argues that recent geopolitical developments are bringing stability to global markets through clearer boundaries, particularly via the Monroe Doctrine revival that aims to counter Chinese and Russian influence in Latin America. While markets are re-pricing rather than ignoring risks, Singh warns that Indian equity valuations remain elevated without meaningful correction in nearly a decade, recommending 30-40% allocation to bonds and fixed income to manage volatility in the current challenging trade environment.
*this image is generated using AI for illustrative purposes only.
Global markets are finding unexpected stability amid apparent geopolitical chaos, according to Anurag Singh, Managing Partner at Ansid Capital. Speaking to ET Now, Singh argued that recent developments are actually reducing long-term uncertainty by establishing clearer geopolitical boundaries, though he cautioned investors to "expect the unexpected" in the current environment.
Monroe Doctrine Revival Brings Market Stability
Singh highlighted what he described as a revival of the Monroe Doctrine, where the US seeks to maintain strategic influence across the Western Hemisphere. This approach aims to counter growing Chinese and Russian involvement in Latin America, where several nations have experienced prolonged political and economic instability.
"This actually brings more certainty to the world," Singh explained, noting that tighter US control over its hemisphere could stabilise energy and commodity markets, including oil. He observed that US equity markets appear to be reflecting this sentiment positively, with investors responding favourably to decisive geopolitical action.
Risk Re-pricing Rather Than Risk Ignorance
Addressing concerns about potential market complacency amid multiple geopolitical flashpoints spanning from Latin America to East Asia, Singh clarified that investors are not ignoring risks but rather reassessing them. "When lines are clearly drawn, uncertainty reduces," he stated, suggesting that clearer spheres of influence could encourage Europe to strengthen its defence posture while reducing prolonged global policy ambiguity.
The market expert emphasised that this clarity in geopolitical positioning allows for better risk assessment and pricing, contributing to overall market stability despite surface-level tensions.
Asset Allocation Strategy in Uncertain Times
Regarding investment strategy, Singh acknowledged that precious metals often benefit during uncertain periods but cautioned against viewing gold as the sole hedge. He pointed to strong equity returns in several undervalued global markets over the past year, including parts of Latin America and Asia, highlighting the importance of selective country allocation.
"There will always be opportunities in undervalued markets and exits from overvalued ones," Singh noted, emphasising the need for dynamic global diversification rather than single-asset strategies.
India Valuation Concerns Persist
Turning to the Indian market, Singh raised significant concerns about elevated valuations. He noted that Indian equities have not experienced a meaningful correction in nearly a decade, largely supported by strong capital inflows.
| Market Concern | Details |
|---|---|
| Valuation Risk | No meaningful correction in nearly a decade |
| GDP Growth | Valuations not pricing in lower nominal GDP growth |
| Recommended Bond Allocation | 30-40% to manage volatility |
| Trade Environment | Challenging conditions amid stalled negotiations |
"Valuations are still not pricing in lower nominal GDP growth," Singh observed, suggesting that a healthy market correction could create better long-term opportunities. Until such correction occurs, he advised investors to maintain higher allocations to bonds and fixed income—potentially 30-40%—to manage volatility effectively.
Singh also cautioned that global trade conditions could remain challenging for India, particularly amid stalled trade negotiations, though he emphasised that such policy decisions should remain with the government. "In this environment, disciplined asset allocation and global flexibility matter more than chasing returns," he concluded.
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