Synopsis
Market experts suggest that during times of market volatility driven by US tariffs and global uncertainty, investors should focus on long-term strategies rather than making impulsive decisions based on short-term market noise.Key Takeaways
- Investors should prioritize long-term strategies.
- Panic decisions often lead to losses.
- Focus on sectors like FMCG for better recovery potential.
- Monitoring EPS and Nifty levels is crucial.
- India's GDP growth outlook remains positive.
New Delhi, April 7 (NationPress) The markets are responding to concerns related to US tariffs and global uncertainties; however, market experts emphasized that such periods of volatility have historically tested and ultimately rewarded long-term conviction.
Similar to their global counterparts, the Indian stock markets reacted sharply, experiencing a significant decline due to the US reciprocal tariffs.
Arvind Kothari, smallcase manager and Founder of Niveshaay, stated that panic is seldom an effective strategy and it is crucial to remain anchored to fundamental principles.
“We encourage investors to maintain composure and focus, steering clear of impulsive choices influenced by short-term fluctuations. While it's challenging to identify which sectors will recover first, domestic-focused areas such as FMCG and consumption seem to be in a better position in the near term,” he added.
On the other hand, sectors heavily reliant on exports or those linked globally may take more time to recover, with clarity expected to develop gradually. Such periods often set the stage for the next growth cycle. As the situation clarifies, maintaining investments in fundamentally strong companies is likely to facilitate recovery and generate long-term value, according to Kothari.
Manish Jain, Chief Strategy Officer and Director of Mirae Asset Capital Markets, noted that from the current level (Nifty around 23,200), a correction of 5-6 percent (to around 22,000) is anticipated.
“This is due to PE contraction. Should EPS contraction begin, a correction exceeding 10 percent in Nifty could trigger a drop to below (or around) 20,000, so it’s essential to monitor this and the upcoming earnings closely,” he remarked.
India's long-term narrative remains robust, with GDP growth projected at 6.5 percent for FY25.
“The debt-to-GDP ratio is expected to drop by at least 5.1 percentage points from 2024-25 to 2030-31. At some point, India could become a haven for FPIs,” Jain stated.
“We anticipate that Private Banks, FMCG, OMCs, and Paints will spearhead the recovery, while the IT sector is likely to lag,” added Karthick Jonagadla, smallcase manager and Founder of Quantace Research.
