As the tides of global trade show signs of slowing down, market experts are turning their attention to domestic demand as the primary force likely to steer market performance in the near future. Dhananjay Sinha, a respected market analyst from Systematix Group, shared his insights in a recent conversation with ET Now, highlighting how the focus is shifting toward India’s internal economic strengths amidst external uncertainties.

Global trade momentum has historically played an influential role in shaping market dynamics, but recent indicators suggest a deceleration. Factors such as geopolitical tensions, supply chain disruptions, and cautious global spending have led to slower export growth and trade volumes worldwide. This slowdown naturally heaps pressure on markets that once heavily relied on export-driven growth. However, India appears poised to navigate these challenges by leveraging its robust domestic demand.

Sinha points out that while external trade factors are becoming less predictable, the domestic consumption story in India remains fundamentally strong. The middle class’s growing purchasing power, coupled with ongoing urbanization and a youthful demographic, is driving consumption across various sectors. This internal demand momentum provides a buffer and could stimulate corporate earnings even when the global environment feels uncertain.

Corporate earnings, according to Sinha, are expected to reflect this mixed backdrop. Companies with significant exposure to domestic markets are better positioned to deliver steady results, whereas businesses more reliant on exports might face headwinds. This divergence will likely influence sectoral performances and investor decisions, making it crucial to analyze specific industry dynamics.

Additionally, government policies aimed at promoting investment and consumption could further energize domestic markets. Initiatives that simplify regulatory frameworks, boost infrastructure spending, and promote local manufacturing (Make in India) align well with the narrative of domestic demand-led growth. Such measures often translate into increased consumer confidence and business optimism, both vital ingredients for healthy markets.

Today’s markets also illustrated this complexity with notable volatility. Some sectors showed mixed performances, reflecting the interplay between global uncertainties and local economic activities. Investors are thus advised to stay vigilant, monitor sector-specific developments, and consider the broader macroeconomic context.

Looking forward, Sinha remains cautiously optimistic. He emphasizes the importance of not overestimating the immediate impact of global trade disruptions but advocates a balanced approach, recognizing the strong undercurrents of domestic demand. This perspective encourages investors to recalibrate strategies, focusing on sectors and companies poised to benefit from internal consumption trends.

In conclusion, as global trade momentum decelerates, India’s domestic demand emerges as a key pillar supporting the country’s market resilience. With consumption trends holding firm and supportive policy environments, India’s markets might well find new avenues for growth driven by homegrown factors. Investors and market participants should thus keep a close eye on domestic consumption patterns and adapt to the evolving landscape accordingly.