Kranthi Bathini, Director – Equity Strategy at WealthMills Securities, said, “Markets, which touched an all-time high of around 26,300 recently, have entered a consolidation phase.”
What’s dragging markets?
“After scaling record highs, markets were clearly waiting for a trigger to correct,” Bathini told ETMarkets Live. “Large-cap stocks saw sharp profit booking, with names like Reliance correcting nearly 5%.” He added that the ongoing correction is more time-wise than points-wise, a trend visible over the past few months.
Tariff shock rattles sentiment
Market sentiment weakened after reports emerged of proposed US tariffs of up to 500% on certain imports, catching investors off guard amid expectations of progress on a bilateral trade deal.
“Such tariff levels are unheard of. This has turned into a clear negative for market sentiment in the short to medium term,” Bathini said. Such uncertainty triggered aggressive foreign selling with FPIs offloading 3,300 crore worth of equities in a single session and adding pressure on benchmarks.
Sectors under pressure
Selling has been broad-based, but some pockets have been hit harder. “Oil & gas, energy, power, and infrastructure stocks have seen the maximum pressure this week,” he said. “Export-oriented sectors, including IT, are also under stress due to global trade concerns.”
Key levels to watch
From a technical perspective, Bathini highlighted 25,500 on the Nifty as an important near-term support. “There is significant put open interest at the 25,500 strike, which could act as a support zone,” he added.
Global cues remain shaky
Rising geopolitical tensions and unpredictable global trade dynamics continue to cloud the market outlook. “Markets dislike uncertainty, and current global developments are creating volatility,” Bathini said, adding that such phases often throw up long-term investment opportunities.
Expert View: What should investors do?
Bathini advised investors to stay focused on India’s domestic fundamentals despite near-term volatility. “India’s macros remain strong. GDP growth is healthy, interest rates are on a downward cycle, and earnings are expected to improve,” he said.
Investment cues from Bathini:
- Focus on domestically driven sectors like banking and consumer stocks
- Defence remains attractive amid global geopolitical tensions
- Infrastructure could gain traction ahead of the Union Budget in February
- Stick to large-caps; be highly selective in mid- and small-caps, with emphasis on valuations, order books and cash flows
- While global risks may keep markets volatile in the near term, experts believe corrections should be viewed as opportunities rather than exit signals.
- “Periods of fear and uncertainty often create the best long-term entry points,” Bathini said.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts/brokerages do not represent the views of Economic Times.)