Gold, oil costs weigh on India sentiment, but Quant MF sees decade-long growth runway

As per the latest business developments, India’s dependence on high-ticket imports such as oil and gold, along with limited exposure to the artificial intelligence boom, has weighed on market sentiment, but firm corporate earnings and domestic demand could keep the country attractive to global capital, according to Quant Mutual Fund.

The Sandeep Tandon-backed fund house, in its September 2026 market commentary, stated it anticipates the coming decade to belong to India, pointing to robust expansion and profitability trends among Indian firms. It highlighted discretionary consumption, banking, real estate and industrials as key domestic demand drivers.

Corporate earnings expansion remained firm in the first quarter of FY27, with earnings expansion for the Nifty, Nifty Next 50 and Nifty Midcap indices at 14%, 27% and 38%, respectively, excluding oil marketing firms, the fund house stated.

In August, the Nifty 50 corrected 1.2% during the month, although broader markets posted marginal upside. In contrast, gold, silver and Bitcoin advanced 10%, 15% and 25%, respectively, according to the fund house.

Quant stated elevated oil and fertiliser import costs could additionally threaten anticipated monetary easing cycles across developing Asian economies.

Betting against crowded AI trade

Quant stated the surge in spending on artificial intelligence has created a crowded investment theme globally. It noted that major US hyperscalers—including Amazon, Alphabet, Meta and Microsoft—had collectively spent more than $1 trillion on AI infrastructure since 2023, with combined annual capital expenditure anticipated to exceed $1 trillion in 2026 and 2027.

The fund house stated its behavioural analytics framework is identifying opportunities in an “anti-AI trade”, while its India portfolios are focused on firms and sectors it considers under-owned, under-researched and under-valued.

It has remained relatively underweight on manufacturing firms because of uncertainty around input costs and supply chains, while increasing exposure to IT services as valuations in the segment entered what it described as neglected territory. It stays constructive on energy, infrastructure, select NBFCs, asset management firms, auto ancillaries, hotels, pharmaceuticals, telecom and data centres.

The fund house additionally anticipates market consolidation to become more entrenched in large-cap and blue-chip stocks, potentially shifting the focus of alpha generation towards bottom-up opportunities in the micro-, small- and mid-cap segments.

Quant stated its investment approach is centred on dynamically adjusting portfolios as market regimes change, rather than relying on static buy-and-hold strategies. Its assets under management, including mutual fund schemes and SIF strategies, stood at more than Rs 1.05 lakh crore as of August 31, 2026.