The discussion began with commodities, a space that has seen sharp divergence in recent months. While gold has been under some pressure and Brent crude has slipped back below the $60 mark, silver has quietly powered to fresh highs, clocking an extraordinary run-up of about 128% since the start of the calendar year.
Mark Matthews pointed out that silver’s strength is rooted in fundamentals rather than froth. “Well, silver is a necessity for many parts of industry including defence related products and those are going to be in high demand over the next few years.” The industrial and strategic uses of silver, particularly in defence, underpin its longer-term demand outlook.
On gold, he drew attention to an India-specific angle that often gets overlooked in global debates. “Gold, I might just point out, the largest owner of gold in the world is Indian households, private owner, 25,000 tonnes. So, they are now a trillion dollars wealthier in aggregate than they were this time last year, that is another thing that speaks in favour of India.” In his view, this rise in household wealth adds a quiet but powerful support to the domestic economy.
Oil, he noted, remains hostage to geopolitics in the short term, but the longer-term picture looks different. “Oil, of course, can have its ups and downs based on geopolitics but longer term there is just a tremendous amount of supply and at the same time increasing transition to electric vehicles.” That structural shift caps the upside over time.
Copper, meanwhile, stands out as a strategic metal. “Lastly, copper will be very strong on the same basis as silver, an increased need for in defence products but also in the west there is a realisation that too much of the industrial metals are being refined in China and that puts them at a strategic disadvantage, so they want to have their own and that will increase the value of copper.” He added that copper’s importance stretches beyond defence into the electric ecosystem and artificial intelligence supply chains, reinforcing its long-term relevance.Turning to foreign institutional investors and currency moves, Matthews acknowledged the heavy selling India has seen this year, even as he distanced himself from that trade. “Well, the first thing I should say is I cannot speak on behalf of them although I am one because I would not have been a seller of India this year but they clearly were.” He explained that foreign investors offloaded roughly $18 billion worth of Indian equities largely to fund allocations to China, where they had been underweight for several years.That phase, he believes, is largely behind us. “I think that is out of the way. I think that next year foreigners will be buyers of India and I actually think the rupee will be higher at the end of next year than it is now. Our forecast is for 87.” A stabilising currency combined with renewed inflows could materially improve India’s return profile.
Despite the current subdued mood in domestic markets, Matthews sees several areas of promise. “We like the private banks. We like the non-bank financial institutions, the energy sector. We like the engineering companies which would benefit still from the government spending on infrastructure and the IT sector, a big underperformer this year.” On IT, while timing remains uncertain, he expects relief eventually. “You cannot put a date on when the trade problem with America will be solved, but I suspect it will happen sometime next year that they will bring down the tariff and you would probably see a relief rally in the IT space on the back of that.”
On market capitalisation preferences, Matthews struck a clear long-term note rather than a tactical one. Addressing whether his preference for small and midcaps was a one-year or two-year call, he said, “No, I do not remember. I mean, I think that over the very long term small and midcap stocks will outperform the very large stocks by simple function of their small size and becoming bigger and many of them are in sectors that just intuitively you would expect will grow a lot be it hospitality or defence, but that is a very long-term view, that is not just a one-year view.”
Taken together, the message was measured rather than exuberant. Commodities are being driven by structural demand, foreign flows appear poised for a turn, and Indian equities may be setting up quietly for a more constructive phase—one that rewards patience over prediction.
