Speaking to ET Now, Orton said that while global investors are watching upcoming trade discussions and central bank decisions closely, India stands out as a potential outperformer in 2025 due to its resilient fundamentals and improving earnings cycle.
Fed rate cuts likely to support risk assets
Orton expects the US Federal Reserve to deliver another 25-basis-point rate cut, continuing its dovish cycle into December.
“We have a rate-cutting cycle that looks set to continue. Quantitative tightening is likely to come to a close after the Fed meeting,” he said, adding that this backdrop provides a solid foundation for equities, particularly smaller and mid-sized companies.
Historically, global liquidity expansions triggered by Fed easing have benefited emerging markets such as India, where strong domestic demand magnifies the effect of foreign capital inflows.
Trade talks offer a positive catalyst
Orton noted that progress in US-China and US-Asia trade negotiations could reduce uncertainty and improve sentiment worldwide. He also pointed out the potential for new trade deals with India, which could further strengthen its economic positioning.“As trade deals wrap up, India becomes the next logical destination for capital. Lower oil prices and easing geopolitical tensions could make negotiations smoother,” he said.
India well-positioned for catch-up rally
Orton highlighted that India’s earnings recovery and macro resilience make it one of the most compelling emerging markets in the near term.
“We’re already seeing Indian markets form higher highs and higher lows. Earnings growth from banks and corporates like Reliance is encouraging,” he said.
He added that the end of the earnings slowdown and improving liquidity could lead to renewed investor focus on India, especially as global investors rotate out of overbought Asian peers like China and Taiwan.
Valuations elevated but justified
On concerns over high US equity valuations, Orton said current prices reflect strong fundamentals.
“Valuation alone is never a reason to sell an asset. Earnings growth and margin resilience justify where markets are,” he noted, citing strong corporate earnings and improving market breadth in the US as reasons for continued optimism.