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Indian equities are likely to remain volatile in the near term even as the medium-term outlook for the Nifty 50 remains constructive, according to Vinit Bolinjkar, Head of Research at Ventura. In an interview with LiveMint, he said global markets are in a transition phase with geopolitical uncertainty and crude oil movements continuing to influence investor sentiment.
For India, stable macroeconomic conditions, healthy corporate balance sheets and strong domestic institutional participation continued to support the broader structural story. Bolinjkar highlighted that the biggest mistake would be chasing stocks purely based on recent momentum without evaluating business quality and valuations. He also urged investors to focus on quality, valuations and diversification.
Global markets are currently in a transition phase. Major central banks, including the US Federal Reserve, have started moving towards an easier monetary policy stance, while growth remains subdued across regions such as Europe and China. At the same time, geopolitical uncertainties and crude oil movements continue to influence investor sentiment.
For India, the broader structural story remains intact, supported by stable macroeconomic conditions, healthy corporate balance sheets, and strong domestic institutional participation. While foreign investors have remained cautious, domestic flows through mutual funds, SIPs and institutional buying have provided support to markets.
Going ahead, the key factors to watch will be Q2 FY27 earnings performance, rural demand recovery after a normal monsoon, government capital expenditure execution, global interest rate movements, crude oil prices and currency stability.
The medium-term outlook for the Nifty remains constructive, but the market is likely to remain volatile in the near term. The index has corrected from its January 2026 high of around 26,373 and is currently consolidating in the 23,000–23,400 zone.
Immediate resistance sits near 23,800–24,000; a sustained breakout above that could set up a retest of the 26,350–26,500 zone over 6 months, contingent on earnings acceleration.
On the downside, 23,000 remains an immediate support level, followed by the 52-week low near 22,182. A break below these levels could increase downside risks, especially if triggered by global risk-off events, higher crude prices or weaker-than-expected earnings.
Overall, the market environment remains more favourable for selective stock picking rather than aggressive index-level positioning.
The Sensex and Nifty are expected to broadly move in line given their significant overlap in constituents. However, in an environment of higher global uncertainty and cautious investor sentiment, large and established companies with stable earnings visibility could see stronger preference from investors.
Since the Sensex has a higher concentration of large-cap companies, it may benefit from increased focus on quality, liquidity and earnings consistency. Any relative outperformance compared with the Nifty is likely to remain modest and dependent on sectoral movements.
Current valuations appear more balanced compared with the elevated levels seen earlier. The Nifty 50 is trading at around 19.5x consolidated P/E, below its long-term median valuation of approximately 23x.
The recent correction has largely been driven by earnings catching up with valuations rather than a sharp sentiment-driven de-rating. While certain sectors and stocks continue to trade at premium valuations, large-cap valuations appear reasonable if earnings growth remains steady.
The key risk remains execution on earnings growth. Any disappointment in earnings recovery could lead to further valuation adjustments.
Small-caps continue to offer long-term opportunities, but investors need to be more selective at current valuations. The Nifty Smallcap 100 is trading at elevated valuation levels, with limited margin of safety compared with historical averages.
The environment has moved from a broad-based small-cap rally to a stock-specific market where business quality, governance, balance sheet strength and earnings visibility will become increasingly important.
Investors should focus on companies with sustainable growth prospects rather than chasing momentum-driven names purely based on past returns.
Gold continues to receive support from multiple structural factors, including central bank buying, geopolitical uncertainty and expectations of lower global interest rates.
Further upside could come from a weaker US dollar, faster-than-expected monetary easing by global central banks, or any increase in geopolitical risks. On the other hand, stronger-than-expected inflation data leading to a slower rate-cut cycle or easing geopolitical tensions could result in a correction.
While gold remains an important portfolio diversifier, investors should also consider price volatility and avoid viewing it only as a short-term trading opportunity.
In the current environment, maintaining a diversified portfolio is important. Equity exposure should remain focused on companies with strong fundamentals, sustainable earnings growth and quality balance sheets.
Gold can continue to act as a portfolio hedge against global uncertainty and currency volatility, while silver provides additional exposure to both precious metal demand and industrial growth themes.
Investors should maintain adequate liquidity to take advantage of market corrections rather than investing aggressively during periods of heightened volatility. Portfolio allocation should be reviewed periodically based on changes in interest rates, earnings trends and global risks.
The biggest mistake would be chasing stocks purely based on recent momentum without evaluating business quality and valuations.
With large-cap valuations becoming more reasonable while several smaller companies continue to trade at premium valuations, investors should focus on companies with strong earnings visibility, clean balance sheets and sustainable competitive advantages.
A disciplined approach towards asset allocation, diversification and patience is likely to be more effective than attempting to capture short-term market movements.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
Pranati Deva is a seasoned financial journalist with over a decade of experience in high-pressure newsroom environments, currently working as a Senior Sub Editor at LiveMint. Over the years, she has developed a reputation for sharp editorial judgement, a strong grasp of market dynamics, and the ability to translate complex financial developments into clear, engaging stories for a wide audience. <br><br> Her core areas of coverage include stock markets, leading listed companies, currencies, and commodities, with a particular strength in fast-paced, real-time market reporting. She is known for handling breaking market news, earnings-driven stock movements, and macroeconomic developments with speed, accuracy, and context—qualities that are essential in financial journalism. <br><br> Pranati has built a diverse and credible professional track record across some of India’s most respected news organisations, including MintGenie, CNBC-TV18, Business Standard and EconomicTimes.com. During her stints at these platforms, she produced data-driven market stories, curated and steered live blogs during volatile trading sessions, and conducted interviews with market veterans, fund managers, economists, and industry experts. Her work often combines on-ground reporting with analytical depth, helping readers make sense of daily market fluctuations and longer-term trends. An alumnus of the Symbiosis Institute of Media and Communications and Hansraj College, University of Delhi, Pranati brings a strong academic foundation to her journalism. She specialises in real-time financial reporting, with a keen focus on precision, balance, and insight, aiming to decode market movements in a way that is both informative and accessible to readers across experience levels.
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