Markets in a seesaw phase; Investors should use volatility to back largecap stocks: Rahul Shah

Stock markets lost momentum early this week, with a sharp reversal eroding initial resilience and leaving investors wondering whether the correction signals deeper weakness or a pause in ongoing consolidation. Despite the turmoil, market experts point to strong earnings trends and sector tailwinds as reasons to remain constructive. Rahul Shah out MOFSL in an interview with ET Now noted that markets were largely in a “seesaw” phase over the past month, even as gains remained robust. He said: “Overall, markets were in a seesaw… earnings season ended with strong numbers and fourth consecutive quarters of double-digit earnings growth. BFSI saw double-digit growth and should continue to do well, metals remain positive after a strong rally, while steel is expected to pick up, while consumer, autos and cement should also remain strong. In short, we need to capitalize on this opportunity in large cap stocks and we are positive on the markets.” His view reflects confidence that underlying fundamentals remain intact despite short-term volatility.

Attention has also been on Reliance Industries as it ramps up investments in AI, data centers and digital businesses, in addition to expectations surrounding Jio’s future listing. About the shares, Shah said: “Telecom, retail and core businesses together position Reliance well. The stock has not done much in the past year and valuations are reasonable. They are doing the right things at the right time and we are positive on Reliance as a portfolio.”

Addressing concerns around rising debt levels due to new investments, he added: “Reliance has managed debt successfully over the years and most new businesses have scaled well. We are not concerned about debt as cash flows from core businesses are strong – it is just a matter of time.”

As for metals, which have seen some correction amid global uncertainty, Shah described the move as a pause rather than a trend reversal. He said: “The rally in metals over the past six to eight months appears to be on pause due to quarterly volatility. Management commentary remains confident in firm prices. Steel, aluminum and zinc positions remain strong and the metals basket should perform well in the coming quarters.”

While short-term fluctuations may persist, the broader message from market observers is that strong earnings visibility and sector momentum continue to support the case for selective investing, especially in large-cap names.