What’s holding the markets back?
“After scaling record highs, markets were clearly waiting for a trigger to correct,” Bathini told ETMarkets Live. “Large-cap stocks posted sharp gains, with names like Reliance seeing a correction of almost 5%.” He added that the ongoing correction is happening in time rather than points, a trend that has been visible in recent months.
Rate shock shakes up sentiment
Market sentiment weakened after reports of proposed US tariffs of up to 500% on certain imports, catching investors off guard on expectations of progress on a bilateral trade deal.
“Such tariff levels are unheard of. This has clearly become negative for market sentiment in the short to medium term,” Bathini said. Such uncertainty led to aggressive selling abroad, with FPIs offloading Rs 3,300 crore worth of shares in a single session, adding to pressure on benchmarks.
Sectors under pressure
Sales have been broad-based, but some sectors have been hit harder. “Oil and gas, energy, electricity and infrastructure stocks have seen maximum pressure this week,” he said. “Export-oriented sectors, including IT, are also under pressure due to global trade concerns.”
Important levels to watch
From a technical perspective, Bathini highlighted 25,500 units of the Nifty as key near-term support. “There is significant public interest in the strike of 25,500 people, which could act as a support zone,” he added.
The global signals remain shaky
Rising geopolitical tensions and unpredictable global trade dynamics continue to cloud the market outlook. “Markets hate uncertainty, and current global developments are creating volatility,” Bathini said, adding that such phases often present long-term investment opportunities.
Expert view: what should investors do?
Bathini advised investors to remain focused on India’s domestic fundamentals despite the near-term volatility. “India’s macros remain strong. GDP growth is healthy, interest rates are in a downward cycle and earnings are expected to improve,” he said.
Bathini Investment Signals:
- Focus on domestically driven sectors such as banking and consumer stocks
- Defense remains attractive amid global geopolitical tensions
- Infrastructure could gain ground ahead of the Union Budget in February
- Stick to large caps; be very selective in mid- and small-caps, focusing on valuations, order books and cash flows
- While global risks can keep markets volatile in the short term, experts believe corrections should be viewed as opportunities and not 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/brokers do not represent the views of Economic Times.)
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