Nischal Maheshwari, the managing director and CEO of Centrum Broking, is gaining confidence about the Indian stock market as economic indicators begin to show positive momentum. According to Maheshwari, supportive government policies are playing a pivotal role as he becomes increasingly constructive about market trajectories.
After experiencing significant market corrections, with stock prices down between 25-30% from their peaks, Maheshwari believes the time is ripe for investors to begin accumulating shares. He noted, “I am becoming constructive on the market now,” citing recent governmental actions, including tax cuts, interest rate reductions, and increased spending as catalysts for economic improvement.
The Nifty index has undergone about a 10-12% correction, marking this as a strategic entry point for investors seeking to build or diversify their portfolios. Maheshwari emphasizes, “You should go out and start looking for the stocks which you have always wanted to buy and maybe start adding to your portfolio.”
When asked about which sectors he’s focusing on, Maheshwari highlighted banking, consumer goods, and chemicals as particularly attractive. The banking sector has captured his interest after years of underperformance; he explained, “Banking has started looking interesting. It has underperformed for the last four or five years.” With the government injecting capital and cutting risk weightages, Maheshwari believes it's indicative of a turnaround phase for this sector.
Consumer spending is also showing signs of recovery, especially on the rural front, as Maheshwari pointed out, “Rural seems to be now reviving with the government's intervention and good monsoon.” This uptick supports his positive outlook for the fast-moving consumer goods (FMCG) sector, which he believes will benefit as rural consumption resumes its upward trend.
Maheshwari explained, “Stocks have corrected, almost all of them, and once the recovery starts happening on the rural side, you will start seeing the consumption coming back.” FMCG stocks present what he sees as worthwhile investment opportunities as rural economies stabilize and consumer disposable income increases.
Despite some pessimism surrounding certain sectors, such as automotive with stocks like Tata Motors facing challenges, Maheshwari maintains optimism about discretionary spending, particularly among the middle classes benefiting from recent fiscal measures including tax rate cuts.
Further exploring opportunities outside larger corporations, Maheshwari encourages consideration of mid and smallcap stocks, provided there’s comfort with their valuations. “You can look at the mid and smallcaps also,” he suggests, provided investors are willing to evaluate risk based on sector fundamentals.
Overall, Maheshwari’s outlook appears bright amid concerning global economic conditions. He acknowledges existing worries about tariffs and market uncertainties but criticizes the abrupt valuation corrections and reassures investors with, “At these prices, would I start nibbling in the market? Definitely.” His confidence reflects broader sentiments within the investment community as many seek clarity amid fluctuated market sentiments.
Meanwhile, frontline indices like Nifty and BSE Sensex have also faced pressure from foreign portfolio investors (FPIs) withdrawing funds. Recent FPI sales have hit approximately Rs 2.8 lakh crore over the past five months, marking substantial outflows. This wave of selling has contributed to the Nifty’s 15% drop, posing concerns over market stability.
Research analyst Velayudhan noted, “The declines are sharper this time around compared to the October 2021 to June 2022 period primarily due to valuations and a weak currency.” This downturn originates from FPIs reducing their holdings to the lowest levels seen over the past decade, currently at 16.6%. Retail investors, on the other hand, have increased their stakes to 9.6% amid the fallout.
Stock performance reveals mixed sentiments, with notable gainers on the day including Bharat Electronics Ltd., Grasim Industries Ltd., and Eicher Motors Ltd. Conversely, major losers included Coal India Ltd. and Reliance Industries Ltd., showcasing the volatility characterizing this trading period.
Looking forward, Maheshwari’s predictions hinge on how government measures translate practically via increased liquidity and spending power to revitalize the economy, providing strong signals for potential recovery. Each sector's recovery will be closely monitored as investors respond to shifting dynamics throughout the fiscal year.
The Indian stock market carries both risk and opportunity, making this period particularly defining for investors aiming to recalibrate their strategies. With government initiatives working to stimulate business and consumer activity, Maheshwari's insights herald hope for those willing to engage thoughtfully with the markets.
Investors are advised to keep their eyes on banking, consumer goods, and select chemical stocks as potentially fruitful avenues amid the fluctuations of the current market environment.