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Elevated Oil Prices to Challenge Earnings, Bond Yields to Stay High: TRUST MF CEO
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Moneycontrol•20-09-2026, 07:09
Elevated Oil Prices to Challenge Earnings, Bond Yields to Stay High: TRUST MF CEO
- •Sandeep Bagla, CEO of TRUST Mutual Fund, warns that elevated oil prices will make the broader earnings environment more challenging, despite some premium consumption sectors showing healthy growth.
- •Bagla expects bond yields to remain high for several months due to persistent inflationary pressures from tariffs, higher commodity prices, and AI infrastructure spending.
- •He advises investors to focus on individual companies within premium consumption, power, infrastructure, and metals sectors, rather than broad sector views.
- •While companies have managed input costs so far, sustained high oil and commodity prices could impact margins and volumes in Q2FY27.
- •Higher US interest rates could lead to temporary dollar strength and capital outflows from emerging markets, though the dollar-yen volatility is less critical for Indian investors currently.
Key Questions Answered
Tariffs, higher commodity prices, and sustained spending on AI infrastructure are all contributing to persistent inflationary pressures.
Sandeep Bagla recommends looking selectively at premium consumption, power, infrastructure, and metals while emphasizing individual companies over a broad sector-level view.
FCNR(B) flows have improved domestic liquidity to help banks fund credit growth, whereas merchant discount rates are unlikely to be a game changer for banking profitability.
