IGI Logo

Below the Quote on Weekly Market by Krishna Appala, Sr. Research Analyst, Capitalmind Research

Over the past week, Indian equity markets have experienced notable declines across indices. The Nifty 50 index has fallen approximately 4% since February 5, 2025, now standing about 13% below its record high from September 2024. The broader market has also seen significant pressure, with the Nifty Midcap 100 declining by 2.5% and the Nifty Smallcap 100 dropping about 3%. The smallcap index has entered bear market territory, trading over 20% below its December 2024 peak. These declines stem from concerns over U.S. tariff policies and slowing corporate earnings, leading to widespread sell-offs, particularly in small-cap stocks.

Market volatility is a constant feature, but it also creates opportunities. Instead of reacting impulsively to short-term swings, investors should focus on strong businesses with long-term growth potential and structural tailwinds. Historical downturns—such as the Global Financial Crisis in 2008 and the COVID-19 pandemic in 2020—felt daunting at the time but later proved to be opportunities. While today’s market presents its own set of challenges, selective opportunities are emerging. However, macroeconomic tailwinds remain intact. Recent income tax relief and RBI rate cuts are expected to support consumption and savings in the coming quarters. While valuations are not yet cheap, they have moderated, creating selective opportunities for investors.

Volatility, though uncomfortable, is essential for a healthy financial outcome. Market returns are cyclical, and navigating these cycles—weathering downturns and capitalizing on upswings—is key. Timing the exact bottom is nearly impossible. While near-term headwinds persist, history suggests that uncertainty often breeds the best long-term opportunities. Staying focused on high-quality businesses with strong fundamentals at reasonable valuations remains prudent.

Above views are of the author and not of the website kindly read disclaimer