Gold, Oil Costs Weigh on India Sentiment; Quant MF Sees Long-Term Growth Opportunity

India’s dependence on oil and gold imports, along with limited exposure to the global artificial intelligence boom, has weighed on market sentiment. Quant Mutual Fund, however, expects strong corporate earnings and domestic demand to support India’s growth outlook over the coming decade. 

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In its September 2026 market commentary, the Sandeep Tandon-backed fund house identified discretionary consumption, banking, real estate and industrials as key areas supporting domestic demand. It expects the coming decade to belong to India, citing growth and profitability trends among Indian companies. 

The contrast was visible in August. The Nifty 50 declined 1.2% during the month, while broader markets recorded marginal gains. Gold rose 10%, silver gained 15% and Bitcoin advanced 25%, according to Quant MF. 

Earnings remain strong 

Corporate earnings provided a stronger picture in the first quarter of FY27. Excluding oil marketing companies, earnings growth stood at 14% for the Nifty, 27% for the Nifty Next 50 and 38% for the Nifty Midcap index. 

Quant also flagged higher crude oil and fertiliser import costs as a potential concern. According to the fund house, elevated import costs could affect expected monetary easing cycles across developing Asian economies. 

Quant turns to the anti-AI trade 

The fund house has taken a different view of the sharp rise in global AI spending. It considers the investment theme crowded after major US hyperscalers Amazon, Alphabet, Meta and Microsoft collectively spent more than $1 trillion on AI infrastructure since 2023. 

Their combined annual capital expenditure is expected to exceed $1 trillion in both 2026 and 2027, according to Quant. 

Against this backdrop, Quant’s behavioural analytics framework is identifying opportunities in what it terms the “anti-AI trade”. Its India portfolios are focused on companies and sectors that the fund house considers under-owned, under-researched and under-valued. 

Manufacturing stays underweight 

Quant has remained relatively underweight on manufacturing companies because of uncertainty over input costs and supply chains. 

At the same time, it has increased exposure to IT services, where valuations have moved into what the fund house describes as “neglected territory”. 

Its constructive view extends to energy, infrastructure, select NBFCs, asset management companies, auto ancillaries, hotels, pharmaceuticals, telecom and data centres. 

Focus shifts towards smaller companies 

Quant expects consolidation to remain more pronounced among large-cap and blue-chip stocks. The fund house sees this as potentially shifting the focus of alpha generation towards bottom-up opportunities in the micro-, small- and mid-cap segments. 

Its investment approach involves adjusting portfolios as market regimes change rather than following a static buy-and-hold strategy. 

As of August 31, 2026, Quant’s assets under management, including its mutual fund schemes and SIF strategies, stood at more than Rs 1.05 lakh crore.