First the bad news. A possible Greek exit (now looking more likely than ever) from the eurozone may deal a hammer blow to stocks around the world, including India, forcing risk-averse investors to pull money out of risky assets and move into safe-haven options like US bonds and German bunds. A series of aggressive rate hikes by the Federal Reserve can threaten market stability and make investors squeamish about buying shares in places with sluggish earnings growth. As we get closer to the July 5 Greek referendum, and then to the expected liftoff in September, the fears of market instability and volatility are only likely to grow. Global financial markets have spent the seven years since the financial crisis in 2008 in uncharted territory, lurching from one crisis to another and benefitting from unprecedented central bank largesse. In the beginning of this year, it appeared that we may be coming to the end of that era with the Federal Reserve planning to increase rates later in the year, even as early as June. That optimism has faded as first quarter growth in the US slumped and the dollar rose, hurting profitability of American companies. The turmoil over Greece may make the Fed think once again and the dollar fell a bit against the euro on Monday despite the European market volatility as traders pondered that possibility. Now what does all this mean for the Indian investor? Monday’s sharp fall in stocks was reversed in less than a few hours and stocks ended higher on Tuesday, underlining once again the market’s resilience thanks to the emergence of local funds as buyers. The Greek crisis will play itself out this week and early next and things may start to settle down only after that. Nervousness, however, will continue, as the thorny issue of debt restructuring and austerity are not easy ones to solve, and the European Union is known for kicking the can down the road than solve problems quickly. The drama apart, Indian investors have an important issue that is likely to engage their attention in the coming weeks and months. No, it is not the progress of the monsoon or the passage of crucial government bills but signs of revival in the capex cycle after two turbulent years. A substantial pick-up in government spending on capex in the first two months of the year and the flurry of orders and tenders in critical areas like roads, railways and power transmission and distribution point to better times for some of the country’s beleaguered engineering, road and infrastructure firms. According to brokerage firm Emkay, the total value of tenders in May 2015 rose 62% year-on-year to about Rs 35,000 crore led by power distribution, railways, community services and roads. It will take some time for the tenders to be translated into awards and projects but infra industry executives say that the government is moving on awarding a lot of projects this year. In roads and T&D alone, projects worth over Rs 2 lakh crore are likely to be awarded this year itself. April’s industrial growth data and May’s core sector data both show a strong rebound and the mood among some of India’s infrastructure firms is cautiously optimistic. In a recent interview to a television channel, AM Naik, chairman of Larsen & Toubro, said that there is a lot of movement and the capex cycle is slowly picking up from stagnation. “I would say in the highways segment, a lot of money is being spent. On the power transmission and distribution, I can see lot more activities with the coal issue having been resolved. Many half-completed power plants will now see the light of the day.” It may be too early to celebrate as orders and tenders have to translate into profits and sales growth. That is likely to take time. But investors have already begun to notice the trend. The BSE capital goods index is the best performer since early May, rising 9.29% beating the Sensex’s 3.47% gain and the Nifty’s 2.73% rise. Sectors like FMCG, pharma and IT — the leaders of last year’s rally — have lagged behind. The fact that this performance has come at a time of nervousness and concern in the broader market over global and domestic macro issues shows that this is not the result of some speculative bets. If government capex investment continues, industrials will perform better this year and the nascent recovery could begin to take hold. That’s a big story for Indian investors, used to tepid and disappointing growth.