Prefer bonds to equities for now, Says Nitin Bhasin, sees more rate cuts ahead

With equity markets under pressure and gold prices surging, investors are reassessing their asset allocation strategies amid global uncertainties and domestic earnings concerns. Against this backdrop, bonds are emerging as a more attractive option for institutional investors, offering capital preservation and potential for returns in a falling interest rate environment.

Nitin Bhasin, Head of Institutional Equities at Ambit Capital said that the firm continues to prefer bonds over equities in the near term, based on current valuation levels and earnings outlook.

He explained that while some stock prices have corrected, broader market valuations remain elevated, and corporate earnings growth for FY26 is expected to stay muted. Against this backdrop, Bhasin noted that bond yields may decline further as the rate-cut cycle progresses, supporting the case for increased allocation to fixed income.