Expert view: Indian stock market may remain rangebound with opportunities in niche areas, says Trivesh D of Tradejini
I feel the current phase is likely to take some more time to play out. It would ease only when supply from IPOs and block deals slows and earnings growth begins to catch up with valuations. Until then, the market is likely to remain range-bound with selected opportunities in niche areas, as excess stock supply and stretched prices keep upward momentum in check.
The market is now experiencing volatility and dealing with multiple pressures, while turbulence in tech stocks and sector-specific headwinds are adding to the uncertainty. Corporate earnings remain a key concern, as weaker business investment and hiring could drag consumer spending and overall economic momentum, even though some sectors continue to show resilience.
With valuations stretched and IPO supply absorbing liquidity, the Nifty's year-end trajectory will hinge on whether earnings and credit growth can strengthen enough to support current prices. Without such improvement, further gains may be limited.
That said, optimism remains for better macro conditions ahead, with falling inflation, government focus on infrastructure spending, and steady domestic flows through SIPs providing support. Global cues, especially stability in oil prices, will also play an important role in shaping sentiment as we move closer to year-end.
Overall, Indian markets are not very cheap at present, particularly when compared to the valuation of global peers, but the lack of strong earnings momentum raises concerns. Markets may stay under pressure unless earnings revive.
On the happier side, the Prime Minister's Independence Day announcement on GST reform, which involves cutting tax slabs, is a meaningful development.
Lower GST means products in sectors like autos, consumer goods, cement, and insurance become more affordable, which can lift consumption and manufacturing and support the economy.
Over time, this translates into stronger earnings visibility for these industries, which is why markets see it as a positive tailwind. But this effect can only be seen after the implementation. In my view, investors should remain vigilant while tracking corporate performance and global trade as well.
While policy support continues to drive opportunities in the power sector, particularly renewables, logistics, and pharma are also emerging as value plays, helped in part by tariff-related positioning.
Additionally, if seen, midcaps in industrials, healthcare, and NBFCs are increasing the interest for their long-term potential as valuations ease.
Strong Q1 performances from cement, oil and gas, and utilities keep these sectors in focus, but the broader approach at the moment is about connecting the dots, not trying to win outright.
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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of the expert, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
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