Markets are expected to remain volatile throughout the year due to geopolitical uncertainty, which is hindering an earnings recovery, according to Rishi Kohli, CIO of JioBlackRock AMC. Kohli stated that while earnings growth had begun to improve, the current environment has disrupted this trend. He noted, “One quarter for sure impact is there, it could go into second quarter if this continues.”
Kohli emphasized that as long as uncertainty persists, “volatility is there to stay.” He anticipates that even after clarity emerges, markets may take time to adjust to the temporary earnings impact. He expects the downside to be relatively contained compared to last year, suggesting that a significant portion of the correction has already occurred.
Instead of a sustained rally, Kohli foresees a fragmented market environment with “a lot of sector rotation, a lot of stock rotation.” He indicated that investors will need to navigate shifting leadership across sectors. Kohli also mentioned that performance dispersion across funds is likely to widen, with outcomes increasingly dependent on strategy and allocation.
In response to the current market conditions, Kohli announced that the firm is preparing to launch a Systematic Investment Framework (SIF) to manage risk and deliver stable returns. He noted that this strategy becomes more relevant in volatile markets. Kohli also commented on foreign investor flows, suggesting that near-term sentiment could remain weak but long-term concerns are downplayed.
