Market fatigue visible; GST 2.0 positive for discretionary demand: Capitalmind CEO

Markets aren’t reacting as sharply to headlines as they used to, even when the news is positive, said Deepak Shenoy, Chief Executive Officer at Capitalmind. Speaking on BT TV’s Market Masters, Shenoy called the recent GST rejig “very positive” for consumption but noted that price action has been restrained.

Indian equities started the week on a strong footing but gradually lost momentum, closing lower as optimism over GST rationalisation waned and global trade tensions resurfaced.

“There are not that much positivity in positive news, and there are not that much negativity in negative news,” Shenoy told BT TV, adding, “The markets seem to be a little fatigued of news.”

According to him, the GST cuts should lift affordability and nudge up discretionary spending, even if staples don’t see a volume bump. “GST’s changes… will increase affordability in discretionary purchases… You do not buy substantially more cereal just because GST has come down,” he said, pointing out that consumers may trade up—say, to a higher cereal brand—or tweak baskets toward more protein, or even reconsider a car upgrade.

On market setup, Shenoy characterised the phase as the tail end of a “flagging” tape: buying interest has cooled, but supply isn’t aggressive either. “As much as the buying is done, there are not much selling coming in,” he said, noting similarly muted reactions to negative headlines like geopolitical conflict and “American tariffs”.

How Capital Mind is positioned

Shenoy, who runs about Rs 2,000 crore in portfolio management services (PMS) and has also a mutual fund for retail investors, outlined a barbelled approach:

Quant strategies that screen price and fundamentals have found traction in new-age digital names and services—notably financials, travel & transportation, hospitality, and hospitals—that “have done very well in the last few years,” he said.

Fundamental portfolios are overweight manufacturing and domestic capex beneficiaries, riding India’s infrastructure push. He cited opportunities across the ecosystem—from electricity downstream plays to companies linked to roads and rail build-outs.

Shenoy said this domestic-production tilt sits under Capital Mind’s PMS theme “Surge India,” focused on what India makes for itself. The backdrop, he added, is a policy and trade environment that’s nudging firms to localise. Because of “America’s tariffs… we need to produce more for ourselves rather than trying to import,” he said.