The sharp decline of 1,000 points in the Sensex and the erosion of Rs 10 lakh crore in market value reflect the heightened volatility currently gripping Dalal Street. This downward trend has been fueled by a combination of global and domestic factors, including concerns over US tariffs, ongoing foreign investor selling, and weak Q3FY25 earnings. Despite positive cues from the Union Budget 2025 and the Reserve Bank of India’s recent rate cut, both the Sensex and Nifty are down 3% year-to-date, with retail investors bearing the brunt of the market’s correction.
In the face of these challenges, market experts suggest that panic selling is not the ideal response, particularly for long-term investors. Kranthi Bathini, Director of Wealth Mills, notes that while mid- and small-cap stocks have been hit hard, large-cap stocks like Reliance Industries, and domestic-centric sectors such as defence and infrastructure, remain attractive. According to Bathini, the current market fluctuations are likely to be short-lived, and long-term investors should use these dips as buying opportunities.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, attributes the market’s struggles to global factors, especially the US’s tariffs on steel and aluminium. However, he believes that the market is oversold and a recovery may be on the horizon. He recommends that investors shift from mid- and small-cap stocks, which are overvalued, to large-cap stocks that are currently more reasonably priced. Despite the likelihood of continued foreign institutional investor (FII) selling, Vijayakumar suggests that a pullback in the market remains possible, with opportunities for investors to re-enter.
For those considering mutual funds, Sameer Mathur, MD and Founder of Roinet Solution, suggests a systematic investment plan (SIP) approach to navigate market volatility. He advocates for large-cap and flexi-cap funds, with a minimum investment horizon of five years. For conservative investors, balanced or hybrid funds may be a better fit, offering better returns than traditional fixed-income assets while reducing risk exposure.
In the current scenario, experts recommend a balanced investment strategy, focusing on large-cap stocks, domestic-centric sectors, and phased investments through SIPs. Rather than selling in a panic, investors can use the market’s short-term volatility to rebalance their portfolios, with a focus on long-term wealth creation.
Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the Business Headline. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.
