September Pulse - Sage Views - Stage set for Growth

"The individual investor should act consistently as an investor and not as a speculator." - Benjamin Graham

Dear Investor,

Indian equity markets extended their downward trajectory in August, marking a second consecutive month of declines. The imposition of heavy tariffs by the US overshadowed optimism surrounding GST cuts, leading to a 1.4% drop in the Nifty and a 1.7% decline in the BSE Sensex. Broader markets faced steeper losses, with the Nifty Midcap 100 falling 2.9% and the Nifty Smallcap 100 plunging 4.1%. Investor confidence was dented by a 25% U.S. tariff on Indian goods, compounded by an additional 25% levy effective from August 27.

Sector-wise, Auto, Consumer Durables and FMCG sector were the top gainer among various sectors in August-25 with returns of 6%, 2% & 1% respectively MoM, while IT and Realty was loser with -5% returns MoM in August-25.

Market Outlook: Despite global headwinds, Indian equity markets are expected to remain robust, supported by strong domestic investor support and limited direct impact from U.S. tariffs on the earnings of listed companies. Improving consumption trends, fuelled by GST incentives and moderating inflation, should support a sustained economic revival. India’s contribution to global GDP growth is rising steadily and this gives us an edge over other economies in the future.

This also gives us more bargaining power when we are having trade agreements with other regions (ES, EU, etc). We believe the current tariff headwind by the US is temporary, and as we have seen in the first few weeks of this month, there are indications of a positive trade deal by November. Lastly, rainfall this season has been great, which matters to us economically too. Inflation is low, and we have much-needed support from the government through the recent GST reliefs, which will most likely support earnings in the next few quarters. What we will need is a continuity of such reforms in some way or another for us to get through this tough phase. S&P also rerated India and gave an upgrade after 18 years. This means a lot in terms of where we stand globally as an economy.

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What should investors do?

As discussed in our June newsletter, markets are going through a time correction phase, and we are now hearing this from market veterans during their media interactions, which means this indeed is a year of time correction. Our valuations are reasonable but still a bit higher than the long-term average. Due to various factors mentioned above (in Market Outlook), there is a high possibility that we will keep trading at reasonably high valuations. Investors should make sure they keep buying on every dip so that they don’t feel FOMO later.

Asset Allocation at play: Sailing through 2025 will be tough for investors however we are confident about growth prospects in the second half of the year through 2026, which will bring some cheer to equity investors. Having said that, I would want to once again remind you that investors should moderate their return expectations to a more realistic number and not expect 2024-like returns from the market. Asset allocation will play an important role in the next few quarters, so don’t invest blindly and seek expert advice if necessary.

What’s new at Sage Capital?

We are glad to announce a completely new website for all of you, which has everything you need. From risk profiler to portfolio review to creating a new account to information on all our services and products. The risk profiler which was earlier a Google Forms, is now live on the website itself, and investors can know their risk profile in less than 2 minutes. There will be many more features and tools added to the website as and when they are ready. You can access the new website from the link below.

From September onwards, a new product will be available to all Sage Capital clients, i.e. Specialised Investment Funds a.k.a SIFs. These will have a slightly higher ticket size (10 lakhs). We will keep you updated on all the strategies that will be available in this SEBI-registered product.

You can also sign up for our app and get started with our all-in-one investing app. This will help you to make goal-based investments, and with our guidance, you will be able to do the right asset allocation and optimize your portfolio returns.

Our all-in-one link to access all our resources is here: https://linktr.ee/sage.capital

Apart from all this, feel free to Call/WhatsApp us at +91-8369664202 or reach our team at invest@sagecapital.in

Happy Investing!

Warm Regards,

Nikhil Gupta

www.sagecapital.in