Indian equities should be relatively insulated from the macro headwinds of a stronger dollar, shallower EM easing cycles and likely higher US tariffs on China. However, lofty valuations and weak earnings could limit the upside, said Goldman Sachs (GS), a foreign brokerage. “Indian equity markets have a lower sensitivity to China/global growth and lower beta to the US dollar and rates, suggesting a lesser impact from external macro risks,” it said. MSCI India Q2 profits grew 10 per cent y-o-y, 4 percentage points below consensus expectations at the start of the quarter, with misses outpacing beats. More importantly, earnings sentiment for the broader BSE 200 index has worsened sharply over the past month and is at 2-year lows.
