“The leadership from here on should lie with banks. RBI policy may not have included a rate cut, but the framework remains very supportive. Loan limits and IPO funding have increased, banks can fund mergers and acquisitions, and both private and public sector banks are now taking aggressive positions,” Kant said in an interview to ET Now.
“Structurally, it’s a strong environment for banks to consolidate their NIMs and focus on NII growth. While other sectors like defence and infra were leading earlier, banking and financials should now take the front seat.”
Kant added that this policy environment benefits not just private banks, but also public sector banks, many of which have new management willing to take calculated risks. Risk-weighted asset cushions on home loans and MSM segments further strengthen the sector, making it ripe for selective stock picking.
Beyond financials, allied sectors like fertilisers are also set to benefit from a healthy monsoon. “Fertilisers should see positive movement. Good monsoon conditions mean soil moisture is conducive for fertiliser use. Companies such as GNFC and Chambal Fertilisers could benefit,” Kant explained.
However, he cautioned that government tax cuts and dearness allowance hikes could strain fiscal spending, potentially affecting infrastructure growth. “While the fertiliser pack looks decent, broader macroeconomic factors need to be monitored as fiscal pressures could weigh on overall corporate earnings,” he noted.With banks expected to drive market gains and select allied sectors showing promise, investors may find October shaping up as a month of targeted opportunities. Careful stock selection within these sectors could define the trajectory of the market in the weeks ahead.
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