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Short-Term Equity Uncertainty Amid Global Headwinds

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  Published in Stocks and Investing on Monday, December 15th 2025 at 22:52 GMT by moneycontrol.com

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Short‑Term Equity Uncertain, Long‑Term Growth Backed by Consumption & Investment Policy – A Summary of Neelesh Surana’s Views on Moneycontrol

Published: 12 December 2024 | Moneycontrol

In a recent interview with Moneycontrol, Neelesh Surana – the Group Head of Wealth Management and Chief Investment Strategist at ICICI Bank – offered a nuanced perspective on India’s equity markets. While he acknowledged heightened volatility in the short‑term, he argued that the country’s long‑term growth trajectory remains robust, driven by rising consumption, structural reforms, and a supportive investment policy framework.

1. The Current Market Landscape

Surana begins by outlining the key factors fueling short‑term uncertainty:

Surana notes that while these variables can cause sharp market swings, they are largely “transitory” and do not fundamentally undermine the country’s growth potential.

2. The Long‑Term Growth Engine: Consumption & Investment Policy

2.1 Consumption: A Rising Tide

Surana emphasizes that consumption is the “true engine” of India’s long‑term GDP growth:

• Demographic Dividend: With a median age of 28 years and a rapidly urbanising middle‑class, household spending is set to rise steadily.
• Digital Economy: The proliferation of e‑commerce, digital payments, and fintech platforms is expanding access to credit and boosting discretionary spending.
• Retail & Services Expansion: Sectoral data shows consistent growth in retail, real‑estate, and consumer services, each benefiting from rising disposable incomes.

He cites the National Statistical Office’s latest retail sales data, which reported a 7.5 % YoY increase in February 2024 – a stark contrast to the 3.2 % rise in the same period a year earlier.

2.2 Investment Policy: A Strategic Focus

Surana stresses that policy initiatives are providing a conducive environment for capital formation:

• GST & Tax Reforms: The Goods and Services Tax (GST) has improved tax compliance and broadened the tax base. Recent income‑tax reforms have simplified filing and reduced audit rates, encouraging compliance.
• FDI Liberalisation: The government has further relaxed FDI caps in sectors like retail, defence, and aviation, making India an attractive destination for foreign capital.
• Infrastructure Spending: The National Infrastructure Pipeline (NIP) envisages ₹40 trillion of investment over five years, with a focus on roads, rail, ports, and digital connectivity.
• Digital Payments & ESG: The RBI’s push for digital payments (Unified Payments Interface – UPI) and the increasing adoption of ESG criteria among institutional investors are creating new avenues for sustainable growth.

Surana highlights that the Government’s “Make in India” initiative, coupled with Startup India and Digital India policies, are creating a vibrant entrepreneurial ecosystem, further reinforcing long‑term growth.

3. Sector‑Specific Outlooks

Surana breaks down the outlook for key sectors, emphasizing both opportunities and risks:

• Consumer Staples & FMCG: Strong demand resilience; moderate pricing pressure. Recommended for investors seeking defensive exposure.
• Healthcare & Biotechnology: Growing domestic health‑care infrastructure and an aging population. Potential for high growth but subject to regulatory changes.
• Information Technology (IT): Continued demand for digital transformation services. Cyber‑security and cloud computing remain top themes.
• FinTech & Payments: The UPI ecosystem is still expanding. Regulatory clarity on data privacy is needed.
• Renewable Energy & Green Tech: Favorable policy support (e.g., renewable purchase obligations) and a global shift toward decarbonisation create long‑term upside.
• Infrastructure & Construction: Strong pipeline under the NIP. However, construction costs and land‑acquisition delays pose risks.

4. Investment Strategy Recommendations

Given the dual nature of short‑term volatility and long‑term fundamentals, Surana proposes a balanced approach:

1. Diversified Equity Exposure
   - Use a mix of large‑cap, mid‑cap, and theme‑based ETFs to spread risk.
   - Allocate 60 % to core sectors (consumer staples, IT, pharma) and 40 % to growth sectors (fintech, renewable energy).

2. Risk‑Managed Positioning
   - Hedge equity exposure with index‑linked derivatives during periods of high volatility.
   - Maintain a cash buffer to capture opportunistic trades post‑volatility spikes.

3. Systematic Investment Plans (SIPs)
   - Regularly invest via SIPs to smooth entry points and benefit from rupee‑cost averaging.

4. Long‑Term Focus
   - Hold quality stocks for 5–10 years, focusing on companies with strong balance sheets, high return on equity, and sustainable competitive advantage.

5. Continuous Monitoring
   - Keep abreast of macro‑economic data releases (GDP growth, PMI, inflation) and RBI policy statements.

5. Broader Context: Linking to Other Moneycontrol Articles

Surana’s insights dovetail with several other Moneycontrol pieces that provide deeper context:

• “RBI’s Monetary Policy Outlook” – Explains how the RBI’s repo rate decisions and liquidity stance are shaping credit conditions and market sentiment.
• “India’s Fiscal Deficit & Growth Forecast” – Details the government’s fiscal stance, debt‑to‑GDP ratio, and the impact of spending on long‑term growth.
• “Global Economic Slowdown and Its Impact on Emerging Markets” – Discusses how slower growth in the U.S. and China is influencing capital flows into India.
• “Top 10 Emerging Sectors in India” – Highlights sectors such as fintech, renewable energy, and e‑commerce that are poised for growth.

These articles collectively reinforce Surana’s central thesis: while short‑term equity markets remain uncertain, India’s macro‑economic fundamentals – driven by consumption, a supportive policy environment, and structural reforms – provide a solid foundation for sustained long‑term growth.

6. Takeaway

Neelesh Surana’s commentary presents a pragmatic view of the Indian equity landscape:

• Short‑term volatility is largely a function of policy uncertainty, global headwinds, and liquidity constraints.
• Long‑term fundamentals – a growing middle‑class, structural reforms, and a favourable investment climate – remain strong.

For investors, this translates into a strategy that balances defensive positioning with exposure to growth sectors, while employing risk‑management tools to navigate market turbulence. As Surana aptly puts it, “India’s story is still about to unfold, and the long‑run narrative is one of resilience and opportunity.”