Why Markets Are Not Really Going Anywhere
It's sometimes easier to say where the markets will not go rather than where they will
On Episode 766 of The Core Report, financial journalist Govindraj Ethiraj talks to Amit Goel, Co-founder and Chief Global Strategist at PACE 360 as well as Anindya Banerjee, Head – Currency and Commodity Research, Kotak Securities.
SHOW NOTES
(00:00) Stories of the Day
(01:00) The Markets May Be Near Their Highs But Why They Are Not Really Going Anywhere
(04:32) Gold Prices Continue To Rise But Can The Rally Sustain?
(05:32) What Venezuela Could Mean Not Just To Oil But Metal Prices As A Whole?
(12:21) Oil Prices Are Soft But Stocks Of Us Oil Giants Are Shooting Up
(22:26) Global Capability Centres (GCCs) Accounted For 39% Of Overall Office Space Take-Up In Last Quarter, Says Report
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NOTE: This transcript contains the host's monologue and includes interview transcripts by a machine. Human eyes have gone through the script but there might still be errors in some of the text, so please refer to the audio in case you need to clarify any part. If you want to get in touch regarding any feedback, you can drop us a message on feedback@thecore.in.
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Good morning, it's Tuesday, the 6th of January and this is Govindraj Ethiraj Broadcasting and streaming weekdays from Mumbai, India's financial capital.
Our top stories and themes
The stock markets may be near their highs but why are they not really going anywhere?
Gold prices continue to rise, how far could that rally go?
What Venezuela could mean not just to oil but metal prices as a whole?
Oil prices are soft but stocks of US oil giants are shooting up
And global capability centres accounted for 39% of overall office space take up in the last quarter according to a report.
Markets
It's sometimes easier to say where the markets will not go rather than where they will. For one, while there is a general expectation of a third quarter result impetus to stock prices, it's unlikely to lead to much movement given how narrow the movement of the markets, particularly the benchmarks, have been in the last year.
Or put more simply, there are just no visible triggers for a sharper or broader, for that matter, up move even though Indian indices have recovered to hit fresh record highs including on Monday. Now the only triggers that are very visible and quite literally so are the ones pointing in the opposite direction which is obviously what's keeping the markets somewhat subdued. Let's start with the US President Donald Trump's statement on Monday that Washington could raise tariffs on Indian imports if India does not stop buying Russian oil.
He told reporters about Air Force One that India wanted to make me happy basically. Modi is a very good man. He's a good guy.
He knew I was not happy and it was important to make me happy. They do trade and we can raise tariffs on them very quickly. It would be very bad for them.
Now since August, the US has been imposing a 50% tariff on Indian imports, not all of course. Of this, about 25% is linked directly to India's purchase of Russian oil. Now India is unlikely to sign on anything unless the US removes that 25% punitive tariff.
On the other hand, negotiations have been going on for nine months. So the only thing that is clear including from Trump and US Senator Lindsey Graham's statements overnight is that there is no immediate resolution in sight nor is it being worked upon at least from the US side, something our foreign affairs expert guest Indrani Bakshi told us as well on Monday, which in turn means that the markets, whether equities or currency, can brace for more uncertainty and volatility going ahead. Meanwhile, on Monday, Indian markets were down after a fairly choppy trade thanks to a fall in IT, oil and gas stocks.
The NSE Nifty 50 was down 78 points to 26,250 and the Sensex was down 322 points to 85,439. Though earlier in the session, the Nifty did hit a record high of 26,373 before giving it up. The broader markets were mixed.
The NSE Nifty mid-cap was down 0.16%. The Nifty small-cap index was, however, higher by 0.5%. FIS, at least as per figures that we saw on Monday, was still selling into 2026 and the rupee is under pressure. It was down on Monday, tracking Asian peers and pressured by dollar demand. The rupee was down to Rs 90.27 against the dollar versus Rs 90.19 on Friday, according to Reuters.
Meanwhile, emerging markets are going strong. The benchmark for emerging market equities rose to the highest level in its 38-year history thanks to a rally in AI stocks that added about $10 trillion to global shareholder wealth since April, according to Bloomberg, adding that the MSCI Emerging Markets Index was up again on Monday and set for a record close, also marking the best start to a year since 2018. Taiwan Semiconductor Manufacturing, or TSMC, accounted for more than half the gauge's gains after Goldman Sachs raised its price target for the supplier of Apple and Nvidia Corp.
Other major movers included Samsung, SK Hynix, and Alibaba Group Holding, according to Bloomberg. Bloomberg also said that developing nation stocks have started 2026 on a bullish footing following their largest annual advance in eight years and their first outperformance versus US peers over that period in 2025.
Gold and Silver
Gold and the dollar rose after the ouster of Venezuela's President Nicolas Maduro fanned geopolitical risk.
Growth assets remained in demand, and technology stocks were of course driving most of those gains in equities, according to Bloomberg, which added that spot gold advanced more than 2 percent to climb above $4,430 an ounce, while silver was up 4 percent. Reuters said that geopolitical tensions combined with interest rate cuts, robust central bank purchases, and inflows into exchange-traded funds contributed to bullion's 64 percent gains last year, the biggest annual gain since 1979, and the gold high is $4,549 per ounce on the 26th of December last year, which is barely more than a week. Spot silver had hit an all-time high of $83.62 on December 29, and it had ended its best-ever year on record, that was 147 percent higher last year.
So what are the short to medium trends looking like for gold and silver? I reached out to Amit Goel, co-founder and chief global strategist at investment advisory firm Pace360 based out of New Delhi, and I began by asking him how he was seeing gold and silver prices in the context of the latest events in the Americas.
INTERVIEW TRANSCRIPT
Amit Goel: My understanding is that gold and silver after meteoric rise in December, they have become largely range-bound and this news has sort of woken them up from their slumber. I don't think that even without this news, what we are seeing today in terms of the price rise, we wouldn't have seen that in the coming days and weeks. My point is that we would have probably seen those upsides in any case, but maybe they might have remained in slumber for some more time, you know, before some of these short-term excesses were sorted out and they could go up again.
But now this has provided a trigger for the bulls who were more or less, you know, who had taken a step back in the last few days. They are now probably at it again. Gold and silver look to be on a solid footing on the near-term basis.
I think sometimes geopolitical developments can act as a trigger for something that could have happened maybe a little later and that is what my assumption is that has happened this time around as well.
Govindraj Ethiraj: Right. And if we were to break it down a little, I mean, in terms of the kind of flows we see into various components, particularly of gold, or for that matter, even silver, where are you seeing the demand? I mean, central bank buying, ETFs, individual retail buying, what is sort of standing out at least or has been standing out in the recent past, and then what could change now?
Amit Goel: What is clearly not standing out is the central bank buying. So let's talk about gold first. 2025 has ended with central banks probably buying the least amount in terms of tonnes in the last three to four years.
So we do not have the official figures yet, but the assumption is that it's going to be somewhere in the vicinity of 800 tonnes in the year 25, which is lighter than the thousand plus tonnes that we have become used to in the previous three years, which were 22, 23, and 24. So clearly that is not the catalyst for the up moves that we have seen in the last few months. That is one.
And same thing applies to silver as well. So many, many months back, we had heard that Saudi Wealth Fund has picked up some silver ETFs, but there has been, to the best of my knowledge, no major central bank buying in silver in the last few months. So clearly that is not where we need to look towards for providing the catalyst for any near-term up move.
Individual buying is pretty robust and that buying is happening both in the physical markets. So there is a lot of demand for gold bars, coins. In India, we call them guineas, for example.
There is a lot of demand for those. And in US and in most other places, the demand for gold coins and gold bars is pretty robust. And even demand for physical silver is quite robust in India.
And both gold and silver ETFs are also experiencing buying. So the cumulative gold ETFs now stand at about 98 to 99 million ounces, which is the highest of the last two years. Silver is more like 855-856 million ounces, which is also the highest of, let's say, the last one and a half to two years.
So there is a lot of demand from individuals, from family offices, and from, let's say, ultra-HNIs. There is a lot of demand in both gold and silver. So that is probably, you can say, is a catalyst.
And of course, there is a lot of speculative demand, speculative buying happening on MCX, on the CME Group, and also many other exchanges of the world which trade gold and silver futures.
Govindraj Ethiraj: Right. Last question, Amit. So, you know, you talked about family offices and high net worth individuals.
So as we went into 26, there was a sense that gold and silver would continue to be strong as investment opportunities or investment destinations. Now, the attack on Venezuela seems to have obviously tipped that scale further. What's your sense in terms of how people could look at gold and silver now versus other classes of investments, including, of course, equities?
Amit Goel: Sure. So, Govind, my understanding is that gold and silver are in a situation where you are finding that individuals and family offices are increasing their allocation towards gold and silver, and they are still not that overweight on gold and silver from a longer-term standpoint. Of course, their allocations are meaningfully higher than where they were about one year or two years back.
But I don't think that this has reached a crescendo or they are anywhere near saturation as far as the current situation is concerned. So I continue to see more buying coming in from individuals and family offices and rich families all over the world. But that doesn't mean that they are going to go infinitely higher.
My understanding is that in the near term, probably the path of least resistance is on the way up and not on the way down. But I also believe, Govind, that at some point between February, March, or maybe April, my understanding is probably February is a good time. They are going to become even more overextended and overbought than they are.
And my understanding is that from whatever peak we are going to see in the next couple of months, they are going to go down a lot from that point till maybe another year, year and a half. So I'm not medium-term bullish on gold and silver. I am near-term bullish on gold and silver, and I believe that they are going to become more overextended, more overbought, and then things would reach a crescendo.
And that would be the beginning of a medium-term down move which could last anything from 12 to 15 months.
Govindraj Ethiraj: Right. Amit, it's been a pleasure speaking with you as always. Thank you so much for joining me.
Amit Goel: Thank you so much, Govind.
The India Energy Week Segment
US oil stocks were up in pre-market trading on Monday after President Donald Trump pledged to revive the Venezuelan energy sector following the capture of its president.
Oil prices were, however, down thanks to a supply overhang and limited concerns on the impact of oil flows from the US capture of the Venezuelan president. Venezuela, of course, is home to the largest oil reserves in the world, but only pumps out one percent or less than one percent of the total output. Brent crude futures were at about $60.50, and US West Texas intermediate crude was at about $57.11. Meanwhile, stocks of oil giants were up.
Chevron, the only American oil company presently operating in Venezuela under special US permission, gained as much as 10 percent. ConocoPhillips and ExxonMobil Corporation also rose, according to Bloomberg. Even as Trump said, US oil companies will spend billions of dollars to rebuild Venezuela's crumbling energy infrastructure.
The bill expected is about $100 billion to revive Venezuela's oil infrastructure. Meanwhile, Chevron, which has remained in Venezuela after the seizure of foreign oil assets at the turn of the century, is best positioned amongst global oil giants to immediately benefit from greater US access to the world's largest crude reserves, according to Bloomberg. ConocoPhillips is owed more than $8 billion by Venezuela and Exxon about $1 billion after the nationalisation of assets in Venezuela.
Chevron produces about 20 percent of Venezuela's oil under a sanctions waiver and ships the crude to US refineries and has been shipping oil from Venezuela even as the Trump administration launched a partial maritime blockade, according to Bloomberg. It is, however, unclear how willing global oil companies are to pour large amounts of money into Venezuela run by a temporary US-backed government without established legal and fiscal rules, says Bloomberg. Also quoting ConocoPhillips, which said that it's premature to speculate about future business activities.
Now, where does this leave Indian imports of crude in general and specific? Now, after US sanctions in October on Rosneft and Lukoil, major refiners including Reliance Industries and several public sector companies said they would halt Russian oil purchases to avoid secondary sanctions, imports have not stopped entirely, with lower volumes continuing, which leaves India in a strategic grey zone, according to Ajay Shrivastava of the Global Trade Research Initiative based out of Delhi, who also says that this approach may be weakening India's position. According to him, if New Delhi plans to stop Russian oil imports, it should do so clearly and decisively. And if it intends to continue buying from non-sanctioned Russian suppliers, it must say so openly and support the stance with data.
And if it plans to buy even from sanctioned entities, that choice too must be stated plainly. What no longer works, he says, is ambiguity. Of course, he says, as we all know, that there is no guarantee that cutting Russian oil imports will end US pressure.
Even a full stop could shift the US demands to agriculture, dairy, digital trade, and data governance, he points out. India, unlike China, does not have strategic leverage over the United States, and China is the biggest buyer of Russian crude, but the US has, again, as we all know, ignored it. India has doubled imports of petroleum crude and products from the United States, but the US too will ignore this, Shrivastava said, adding India's exports to the United States have already fallen about 20% between May and November 25, and further tariff escalations could trigger a steeper decline.
I reached out to Anindya Banerjee, head of commodity research and forex at Kotak Securities for a broader take on oil flows, prices, and commodities, and what could be the outcome of the attack on Venezuela and the capture of its president by the United States.
INTERVIEW TRANSCRIPT
Anindya Banerjee: Yes, it's a very interesting and extraordinary times that we are in. There where a sitting president gets picked up. So I think it has larger ramifications for the commodities market.
First, starting with oil. Venezuela is an oil producer, but it's not a significant oil producer. Less than a million barrels a day is produced by Venezuela when the global output is around 103, 104 million barrels.
So that's less than a percent. Even if it were to scale up things immediately within the next 12 months without any fresh dose of investments, it can go up to 1.2, 1.1. So that doesn't really change much of the oil dynamics. Oil market is still well supplied.
It only adds incremental barrels. So that way it is bearish. Coming to other commodities, Venezuela also is rich in various kinds of metals and minerals.
So that has also a play. It's also, it has got good reserves in gas, but again, reserves, not current production. So those are the kind of commodities where the impact could flow because it also creates a kind of increases the global geopolitical risk.
And whenever the risk on the dollar itself, and that means the whole shift of value from dollar to hard metals will accelerate after this kind of thing. And it's not stopping with Venezuela. The kind of comments which has come from the Trump administration over the past 36 hours, they have named Cuba, Colombia, Mexico, Greenland.
Govindraj Ethiraj: So I think it is the entire neighbourhood which could flare up. And if I were to link that question, or rather, if I were to ask you about the linkage between de-dollarization, as you said, and metals, can you define that for us a little more?
Anindya Banerjee: Govind See, de-dollarization in simple terms means end of the monopoly of dollar as a single country reserve currency, which was there since the 1940s when it changed from the pound to the dollar. It accelerated after 1971 when the fiat currency was introduced with the end of the gold standard. Now, de-dollarization is the end of that privilege.
And what it means is that now central banks are looking at an alternative and we are looking at other kinds of currencies which will form the basket of currencies which will become a new reserve currency basket. Now, this does not mean the end of dollar. De-dollarization is not the end of dollar.
It means that having company in terms of the major currencies. So it links up with the multipolarity, which we keep hearing from various political leaders from all over the world. It's in a way what we are seeing in America is consistent with that because if you look at the statement from Marco Rubio, I think over the past 24 hours, he was basically saying that it's West and West means it's our territory.
Why do you want to engage in oil and gas business there? He was referring to China and Russia. So these are kind of things where the global policeman is trying to be a regional policeman.
It's a kind of a downgrade. So de-dollarization is that basically takes away the share of the dollar in the central bank's reserves, the share of the dollar in the global trade, and the share of the dollar eventually in the global payments to other currencies. And it happens via gold.
The last time it happened was, as I said, from pound to dollar in the 1920s and the 30s. Then the US government accumulated massive amounts of gold. This time, the last 17 years, the Asian central banks have accumulated massive amounts of gold and they are continuing to do that.
So that's how it fits into it because what it does is it creates a kind of a political mistrust. Like if suddenly a sitting president can be taken hostage or arrested and paraded in media, whatever the charges. And also now open threats are being given to other countries, Cuba, Mexico, even Greenland and Colombia.
So I think that creates a huge mistrust around the dollar financial system, which means the countries which are outside the Western collective, the Asian countries, the BRICS Plus, they would look to own assets which are not in the control of the Western collective. And that is hard metals. That is gold.
That is silver. That is copper. So that is platinum.
We could see a far more accelerated shift of dollar value into these commodities. And these commodities can rise sharply against the dollar.
Govindraj Ethiraj: Even from here. Okay. Since you are the currency expert on India, we are at about 90 rupees 27 paise as of Monday evening.
What is it looking to you? Or is everything that we've spoken of going to impact the rupee?
Anindya Banerjee: Rupee at this point in time is not directly impacted if oil prices continue to fall, which it is doing since morning. That's net positive. But right now, we are not seeing a crash in the oil prices.
We are seeing a slow decline. And rupee right now is not much more focused on the oil. It's much more focused on the trade war, the sort of the FBA outflows which are happening.
And RBI is allowing a slow drift in the currency for the sake of competitiveness and the trade war which is on. I don't think the Venezuela situation will directly impact unless and until it triggers a big sell-off in the global equities. And that spills over into the Indian equity market through the FBAs.
And that impacts the rupee. Otherwise, I don't see any major impact from Venezuela in the short term.
Govindraj Ethiraj: Right. Anindya, thank you so much for joining me.
Anindya Banerjee: Thank you so much.
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Among other news from India's energy sector, ONGC, or the Oil and Natural Gas Corporation, said on Monday it will take a 50% stake in two joint-venture companies that will own and operate very large ethane carriers, or VLECs, in partnership with Japan's Mitsui Lines. Elsewhere, Hindustan Petroleum said it commissioned a residue upgradation facility at its Vishakhapatnam refinery, significantly enhancing its deep conversion capability, distillate output, and profitability.
This marks a major step in upgrading India's refining complexity and reducing dependence on imported fuels, and help HPCL improve gross refining margins by enabling the processing of heavier and opportunity crudes and delivering a superior product slate, according to the company. And this segment was supported by India Energy Week 2026, to be held from January 27th to January 30th, 2026, in Goa. You can register for the same using the link in the show notes.
A Record Year For Leasing
Office leasing activity in 2025 hit a record 82.6 million square feet, up about 1% year-on-year, thanks to Bangalore, Mumbai, and Delhi NCR. The data is from CBRE Research, and the interesting and perhaps not surprising fact is this.
These three cities cumulatively accounted for 61% of total space take-up. That's, again, Bangalore, Mumbai, and Delhi NCR. Meanwhile, in the last quarter of 2025, that's the calendar, absorption touched about 22 million square feet, driven, once again, by Bangalore, 24%, Mumbai, 22%, and Delhi NCR, 18%.
New supply hit a high of 59 million square feet in 2025. That was up 10%. Bangalore, Hyderabad, and Pune drove those additions with a combined share of 64%.
So who were the companies or types of companies who were taking up space? Well, it's technology companies, flexible space operators, and banking, financial services, and insurance firms who remained the primary drivers of space absorption throughout the quarter and the full year, according to CBRE. So who are the companies taking up this space? Well, domestic firms continue to dominate office space take-up in the fourth quarter with a share of 46%, followed by US companies at 37%. Domestic firms, as analysts in the real estate space have told me in recent months, are essentially companies who are consolidating office space or are just upgrading, moving from old offices to new ones.
Not surprisingly, during the quarter, global capability centres accounted for 39% of overall office space take-up. So that's a boom that continues, including in the office space. That's reflecting the new capacity that's coming up, which is, of course, good for the economy and India's exports.
Tech companies and BFSI firms constituted nearly half the leasing activity driven by GCCs in the fourth quarter. That's within GCCs. It was tech companies and BFSI or banking, financial services, and insurance firms.
