JPMorgan has issued a cautious outlook on India's small and mid-cap markets, advising tactical caution due to expected subdued Q2 earnings. Rajiv Batra of JPMorgan highlighted that earnings have been the key driver behind India's outperformance compared to the U.S., but he remains cautiously optimistic about the markets in the near term. Additionally, Batra noted that the ongoing IPO and primary market issuances are draining excess liquidity from the small and mid-cap spaces. Latika Chopra from JPMorgan expressed a positive outlook on the FMCG sector, noting modest margin expansion in the upcoming quarters, a sentiment held for the last 12-16 months and reiterated in the last 4-5 months. James Sullivan of JPMorgan emphasized that the upmove in the Indian market is driven by domestic institutional investors and clear political goals from the Indian government.