Motilal Oswal sees weak macro as an opportunity — mid & small caps may have already absorbed the worst of FPI selling, and broader markets are showing stronger earnings growth than narrow large-cap indices.
MACRO VIEW
MID & SMALL CAPS
BROADER MARKETS
STRATEGY
Summary
Motilal Oswal Asset Management sees the current weak macro backdrop as an opportunity rather than a reason for caution. The AMC believes mid and small caps have likely already absorbed the worst of FPI ownership decline, while broader markets continue to deliver stronger earnings growth than narrow large-cap indices. Growth opportunities are visible across both new-economy themes — EVs, EMS, renewables, defence, digital platforms — and cyclical recovery plays such as capital markets, select NBFCs, and metals & mining. The AMC favours active strategies and broader market exposure, with the key risk to monitor being prolonged elevated crude prices.
The detail
Macroeconomic outlook
Motilal Oswal Asset Management highlighted that weak macro may present opportunities for investors. The current environment is being shaped by geopolitics-led high oil prices, pressure on forex reserves, FPI selling, and INR depreciation.
These pressures are visible across markets — but, in the AMC’s view, the very conditions creating short-term noise are also setting up the opportunity for selective, disciplined entry into well-positioned segments.
Market & equity view
The AMC noted that mid and small caps may have already seen the worst of FPI ownership decline, suggesting the heaviest selling pressure in these segments may be behind us.
Broader markets are also showing stronger earnings growth compared to narrow large-cap indices — reinforcing the case for looking beyond the top-100 names.
Growth opportunities
Motilal Oswal sees opportunities across a wide set of themes: EVs, EMS, renewables, defence, recycling, capital markets, select NBFCs, digital platforms, electronics, luxury, metals & mining, and select software companies.
The mix spans both structural new-economy growth and cyclical recovery plays — pointing to an environment where stock and sector selection matter more than passive index exposure.
Key risk to monitor
The principal risk identified by the AMC is the possibility of high oil prices sustaining for longer, which would extend pressure on the currency, current account, and inflation — and could change the macro setup more durably than a transient shock.
What this means for investors
Action points
Motilal Oswal’s guidance for navigating June 2026 centres on leaning into broader markets, favouring active strategies, and not flinching at short-term macro noise:
Mutual fund investments are subject to market risks. Please read all scheme-related documents carefully. The views expressed are those of the speaker and do not constitute investment advice.
