How long-term traders can profit in Nifty, Sensex crash from document excessive? EXPLAINED

Indian inventory market: Amid Trump’s tariff remarks concentrating on sectors like metal, vehicles, prescribed drugs, and semiconductor chips, the inventory market is witnessing important volatility. The Indian inventory market declined for the fourth consecutive session on Friday. The Nifty 50 index dropped 117 factors to shut at 22,795, whereas the BSE Sensex fell 424 factors, settling at 75,311. In the meantime, the Financial institution Nifty index slipped 353 factors, ending at 48,981.

Whereas explaining how long-term traders can profit from Nifty, Sensex crash from document excessive, Subhash Chand Aggarwal, Chairman & Managing Director, SMC World Securities Restricted, stated that secure financial progress, devoted steps to push the export sector, and strengthening US-India commerce relations will assist corporations generate increased earnings, which is able to profit long-term traders.

Listed below are some excerpts from the interview –

How long-term traders can profit from Trump’s tariff rant?

Amidst the Trump tariff rant on completely different sectors akin to metal, car, pharmaceutical, and semiconductor chips, the inventory market is experiencing excessive volatility. There may be additionally a steady worry of reciprocal tariffs however it is going to have a restricted influence on India, as India’s GDP progress is predicted to stay sustainable within the vary of 6.3% to six.8% in FY26. India is presently extra targeted on home progress with increased shopper spending and selling infrastructure funding. The US-China commerce struggle will assist Indian exporters because the US consumers will search for different choices to keep away from increased prices. This may result in important export positive factors for sectors akin to electrical equipment, car parts, cellphones, prescribed drugs, and textiles led by India’s strong manufacturing capability and competitiveness. The US is India’s largest exporting vacation spot having a 17.7% share in India’s whole exports in FY24. The latest Modi-Trump assembly has additionally introduced the plans to spice up the bilateral commerce to $500 billion by 2030 which was $190.08 billion in 2023. The great commerce settlement goals to scale back obstacles and ease norms for the service sector, which is able to enhance enterprise confidence. Between April 2000 and September 2024, India obtained an FDI of $67.8 billion from the US and is the third largest investor in India, showcasing its belief in Indian companies. The continued strengthening of commerce relations between the 2 nations will immediately profit the Indian exporters, particularly the IT, pharmaceutical, and digital items sectors. India has taken main steps within the Union Funds with the arrange of an Export Promotion Mission, and BharatTradeNet for offering quick access to export credit score, simplifying commerce documentation, and financing options. The secure financial progress, devoted steps to push the export sector, and strengthening US-India commerce relations will assist corporations generate increased earnings, which is able to profit long-term traders.

Which phase to take a look at for backside fishing?

The inventory market is in a correction section and the overvaluation stress has additionally trimmed down, making a really perfect alternative for backside fishing. Nifty returns fell by round 13% – 14% from all-time highs. The banking sector which has the best weightage within the Nifty 50 can be feeling the pinch of lows. Within the final 6 months, Nifty Financial institution returns fell by round 4% and is buying and selling close to a 52-week low. Nonetheless, it’s buying and selling close to the 6-month low price-to-book (P/B) ratio of two.12, highlighting its undervaluation and shopping for alternative for traders. The easing of the repo price by 25 foundation factors will elevate the credit score demand and revive the credit score progress of the banks. Moreover, bond purchases and VRR auctions by the RBI are the best steps to inject liquidity into the banking sector. The upper credit score progress and RBI’s proactive steps to handle liquidity will pave the way in which for a robust restoration of the banking shares.

High 5 sector picks

After the sluggish demand, inflationary pressures, and poor margins, corporations’ earnings have been dragging down in the previous few quarters. Within the third quarter, there’s a clear signal of restoration in earnings in BFSI, IT, telecom, healthcare, and actual property sectors, making them ultimate for long-term investments. Q3 outcomes had been primarily led by the BFSI sector which noticed an 11% YoY enhance in earnings with PSU banks reporting decrease credit score prices, decrease slippages, and robust revenue progress. The repo price reduce and tax reduction will foster credit score and deposit creation within the banking sector within the close to to long-term. The IT sector witnessed a internet revenue progress of 11.7% on a year-on-year foundation led by the restoration in exports to the US within the BFSI vertical of the IT corporations. The margin enhancements will possible be a key set off for progress within the IT sector. The telecom sector witnessed a whopping 159.2% YoY progress within the internet revenue within the third quarter led by the expansion in information site visitors, user-base enlargement, and rise in ARPU on account of tariff hikes. The healthcare sector witnessed a strong progress of 25% YoY pushed by the robust demand within the US generics market, elevated deal with power therapies, and secure enter prices. Actual property can be a significant winner in earnings with 60% YoY progress led by the rising demand for premium and luxurious choices. All of those 5 sectors have delivered nice leads to the third quarter and are poised to develop in the long term pushed by strong enterprise fashions and better shopper demand.

Any challenges for the Indian economic system?

Whereas India’s progress is secure, there are a couple of challenges that have to be addressed akin to weakening of the rupee, slowing consumption in city sector, and rising uncertainty on the international degree. Numerous steps akin to foreign exchange reserves gross sales to smoothen extreme volatility within the rupee, offering increased tax rebate to boost disposable earnings, and strengthening home manufacturing and exports will assist in navigating these challenges. Within the second quarter of FY25, India’s GDP progress fell to a seven quarter-low at 5.4%. There’s a restoration in rural demand, a dampening in inflation, robust agricultural output, and better capital expenditure. Additionally, the Index of Industrial Manufacturing (IIP) rose to three.9% within the third quarter, increased from 2.6% within the second quarter of FY25. All these elements can enhance India’s GDP progress to six.3% within the third quarter of FY25, marginally increased than the RBI forecast of 6.2%. Within the Union Funds, the fiscal deficit is focused at 4.4% of GDP for FY26, decrease than the 4.8% revised estimate for FY25. The centre’s internet tax income can be anticipated to rise by 11% to ₹28.37 lakh crores in FY26. The finances additionally highlighted the federal government’s dedication to decreasing the nation’s debt-to-GDP ratio yearly. By sticking to a disciplined and cautious fiscal technique, India will obtain macroeconomic stability, increase reserves, and enhance liquidity which is able to deepen the belief amongst international traders. With the improved fiscal place and better shopper spending and funding, India’s financial progress will contact new heights.

Disclaimer: The views and suggestions offered on this evaluation are these of particular person analysts or broking corporations, not Mint. We strongly advise traders to seek the advice of with licensed consultants, take into account particular person danger tolerance, and conduct thorough analysis earlier than making funding choices, as market circumstances can change quickly, and particular person circumstances might differ.