Quant Mutual Fund increases exposure in select private banks; remains constructive on NBFC and 7 other sectors

Quant Mutual Fund, in its monthly update, stated that it has recently increased exposure to select private sector banks. The fund remains positive on large infrastructure, NBFCs, insurance, banks, hotels, pharmaceuticals, consumption, and telecom sectors. The fund house added that its portfolio continues to be tilted towards large caps with healthy overall liquidity, while select mid- and small-cap exposure has been raised across most equity and hybrid schemes.

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Sandeep Tandon‑led Quant Mutual Fund further stated that it remains constructive on equities and anticipates a broader market rally, with the Nifty Smallcap index potentially reaching all-time highs.

The fund house lists five reasons for such positive moves, which includes: First, the Indian Rupee (USDINR) will soon reverse course, reverting from a long-term cycle of depreciation against the US Dollar. Second, the sell flow from FPIs is getting exhausted and peaking out. “We are seeing a re-emergence of passive buying in EMs, indicating that emerging markets have the potential to outperform developed ones,” the monthly release said.

Third, the government of India’s relaxations on individual income tax and GST will yield results in H2 FY26. Fourth, the relatively low interest rate environment and easing liquidity will further support lending and banking activity.

And in the last mentioned, “our call that the September quarter marks the bottoming out of the earnings cycle is playing out well – a gradual improvement in corporate earnings will be realised from this point on,” as the fifth reason.

“At Quant, we remain constructive on Indian equities. Coming in with healthy momentum, the months of December and January have historically been seasonally positive for equities, backing up our view from the beginning of 2025 that H2 of CY25 will turn out to be better than H1. We had highlighted last month that the Nifty and Bank Nifty would touch all-time highs soon, which has played out. In fact, along with these two indices, the Nifty Mid Cap index also made a lifetime high,” the release said.

According to the fund house, the biggest theme through the last month was the uncertainty surrounding whether the Fed will deliver another rate cut; following weaker-than-expected U.S. data (Notably retail and consumer indicators), investors globally ramped up expectations that the Federal Reserve might cut interest rates soon — potentially as early as December.

And this optimism triggered a broad rally: Asian equities rebounded, Treasuries gained, and risk assets regained flows after a volatile stretch.

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For the Fed, the question is whether to pre-emptively cut to support demand or hold steady to avoid reigniting price pressures, and this tension will dominate discussions in December, shaping the dot-plot, forward guidance, and the tone of Chair Powell’s press conference.

The fund house cautions investors to expect heightened volatility across bonds, equities, and the dollar as investors position for the final policy signal of the year.

Summing up the market movement in November, the fund house said that, “In November, Indian equities comfortably outperformed the S&P 500, delivering higher returns of 1.9% and with lower volatility. Gold regained ground by 4.0%, recovering 6% from its monthly lows. Bitcoin, however, slumped by over 16%, though it has recovered ca. 13.7% from its monthly lows.”