Markets have been volatile again after the postponement of talks between Iran, Israel, and the US. The uncertainty pushed crude prices higher and equities lower.
Crude oil fell more than 2 percent today, trading at $98.58 per barrel, down 2.10 percent after touching $100 earlier. The dip reflects the market’s reaction to the stalled diplomatic talks.
A. Balasubramanian, head of Aditya Birla Sun Life AMC, says the current uncertainty does not benefit anyone. He points out that the United States, in particular, is being hurt by rising interest rates and inflation.
Higher inflation forces the U.S. Federal Reserve to keep rates elevated for longer, which raises borrowing costs worldwide and adds to global volatility. In Balasubramanian’s view, the war has become costly for the side that can end it.
He expects a negotiated settlement once commodity‑driven price rises and the inflation they cause become intolerable. However, he does not foresee a quick rebound.
Balasubramanian believes volatility will persist, but the downside is somewhat protected. He cites domestic supports such as FCNR deposits that have already brought in about $20 billion.
He projects total inflows of $50 to $60 billion by September, which would ease pressure on the rupee and on foreign‑exchange reserves. The government has also extended production‑linked incentive schemes for another five years and may announce a pay commission later this year.
On earnings, he notes the first quarter was decent and expects the second quarter to hold up reasonably well. The monsoon has arrived in large parts of the country, including Maharashtra, easing early fears about rural demand.
Balasubramanian forecasts a better second half of the year, helped by the festival season, large IPOs, and AI‑related volatility that could steer money toward emerging markets like India.
He still recommends keeping gold in portfolios, suggesting a permanent allocation of 5–10 percent. He says the broader instability will outlast any single flare‑up.
Although he does not hold gold directly, he runs a gold SIP and urges investors to adopt the same strategy. A gold SIP acts as a hedge against inflation and global uncertainty.
His message is clear: don’t try to time the resolution. A steady gold SIP is a silent saver that protects against both rising and falling markets.