NIFTY NEXT 50

Higher volatility in equity markets clearly indicates instability at present juncture, War in Middle East very tricky as it continues to escalate, Objectives of war unclear or too lofty for a quick resolution

* Higher volatility in equity markets clearly indicates instability at present juncture
* War in Middle East very tricky as it continues to escalate
* Objectives of war unclear or too lofty for a quick resolution

shorts/business/daily-voice-naveen-kulkarni-sees-growth-challenges-to-indian-economy-if-iran-war-gets-prolonged

According to Naveen Kulkarni, the Chief Investment Officer at Axis Securities PMS, Q4 earnings could potentially be good because of the possibility of inventory gains across the system.

However, if the war gets prolonged then there will growth challenges to the Indian economy in the future, he said in an interview to Moneycontrol.

He believes once the Middle East tensions ease, a strong rally in equity markets is a highly likely scenario. &quot;The current challenges to the Indian market are not just related to higher crude prices but also to the availability of gas, certain raw materials, and challenges to shipping routes. These concerns will be addressed immediately once tensions in the Middle East ease,&quot; he said.

Do you see signs of stability in the equity markets, even though US–Iran developments are keeping volatility elevated?

There have been instances of bottom fishing in the equity markets, overall stability is lacking. The volatility index serves as a crucial indicator of market stability, and a higher volatility in equity markets clearly indicates instability at the present juncture. The war in Middle East has been very tricky as it continues to escalate.

While there is a disproportionate difference in the arsenal between the two warring parties, the objectives of the war are unclear or too lofty for a quick resolution. Thus, in a scenario where the global order has clearly destabilized, expecting stability in equity markets is not reasonable.

Does the equity market believe that crude oil prices are unlikely to fall below US$60 per barrel anytime soon?

It seems unlikely that crude oil prices will fall below US$60 anytime soon due to ongoing uncertainty in the market. Freight costs have gone up significantly, and the cost of insurance has also increased many times. This suggests that the instability in the Middle East will persist, leading to potential supply-side issues. Therefore, the chances of crude oil prices dropping below US$60 in the near future are quite remote.

Once Middle East tensions ease, do you expect a strong rally in the markets driven by hopes of robust domestic fundamentals?

Yes, once the Middle East tensions ease, a strong rally in equity markets is a highly likely scenario. The current challenges to the Indian market are not just related to higher crude prices but also to the availability of gas, certain raw materials, and challenges to shipping routes. These concerns will be addressed immediately once tensions in the Middle East ease.

Apart from these challenges, which have arisen because of the war, FY27 was projected to be a good year for equity markets. Thus, once tensions ease, the Indian equity markets will post a very strong rally.

Do you think the broader impact on Q4 earnings will remain manageable if the escalation does not prolong significantly? What are your expectations from the Q4 numbers?

Q4 earnings could potentially be good because of the possibility of inventory gains across the system. However, if the war gets prolonged then there will growth challenges to the Indian economy in the future. Nonetheless, the near term earnings are likely to be good and could surprise positively.

How do you interpret the relaxation of Press Note 3?

The relaxation of Press note 3 is a long term positive and it will help in bringing more investments to India. Indian government recently has been focussed in attracting foreign capital through various routes. This is an additional step which will help in this endeavour.

Do you think the liberalisation of Press Note 3 will strengthen India’s role in global supply chains?

It will strengthen as investments in manufacturing sectors are likely to rise. However, this is a very long term structural theme that will take quite some time to play out.

Do you expect an upward revision in the IT sector’s guidance for FY27 compared to FY26 next month?

Indian IT sector is unlikely to see an upward revision in earnings guidance as the sector continues to see significant uncertainties on account changing industry structure led by AI. However, the sector valuations have become reasonable and dollar appreciation provides some near term cushion. Earnings guidance upgrade is quite unlikely at this juncture.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.

Daily Voice: Naveen Kulkarni sees growth challenges to Indian economy if Iran war gets prolonged

Given current chart structure and weak momentum, any near term rebound likely to attract fresh selling interest, 22,850–22,800 zone likely to act as immediate support area for Nifty 50, On upside, 23,450–23,500 range expected to act as immediate resistance zone

* Given current chart structure and weak momentum, any near term rebound likely to attract fresh selling interest
* 22,850–22,800 zone likely to act as immediate support area for Nifty 50
* On upside, 23,450–23,500 range expected to act as immediate resistance zone

shorts/business/chartist-talk-sudeep-shah-flags-deeper-correction-risk-as-nifty-breaks-61-8-fibonacci-level-suggests-two-stocks

The Nifty 50 closed below the crucial 61.8% Fibonacci retracement level of its previous rally from 21,743 to the all-time high of 26,373. A break below such an important retracement level often implies that the market could require additional time to establish a durable bottom, said Sudeep Shah, the Head - Technical and Derivatives Research at SBI Securities, in an interview with Moneycontrol.

According to him, momentum indicators also confirm the bearish bias, with the weekly RSI slipping to 30.43, its lowest reading since the COVID-19 market crash. This naturally raises the question of how much deeper the correction could extend, he said, adding the 22,850–22,800 zone is likely to act as the immediate support area for the Nifty 50, as a decisive break below 22,800 may trigger another leg of correction towards 22,500.

He suggests buying Aurobindo Pharma, and Coal India for next week. &quot;Both stockks have broken their horizontal trendline on the daily chart,&quot; he said.

As Nifty is nearing a death cross, do you expect another 1,000-point fall from here?

The sell-off on Dalal Street extended into its third straight week, as escalating geopolitical tensions between the US and Iran continued to dampen investor confidence. The decline intensified during the last three trading sessions, with the benchmark Nifty index dropping more than 5% for the week, marking its steepest weekly decline since June 2022. Automobile and banking stocks were among the biggest drags on the index, contributing significantly to the market’s fall. However, the recent sharp correction cannot be attributed solely to geopolitical tensions.

A major factor adding pressure on the markets has been the heightened volatility in crude oil prices which closed above $100 a barrel. Yet, the deeper concern becomes more evident when examining the technical structure of the index.

From a technical standpoint, the Nifty continues to remain in a clear downtrend, with the pace of the decline accelerating in recent sessions. Over the past 27 trading sessions, the index has corrected by more than 12%, making it one of the most pronounced falls seen in recent times. Importantly, the index has been forming weekly candles with long upper shadows over the past two weeks, signalling that each upward move is being met with selling pressure. This behaviour indicates that investors are using rallies as opportunities to reduce exposure.

Moreover, the index has now closed below the crucial 61.8% Fibonacci retracement level of its previous rally from 21,743 to the all-time high of 26,373, highlighting a weakening technical setup. A break below such an important retracement level often implies that the market could require additional time to establish a durable bottom. Momentum indicators also confirm the bearish bias, with the weekly RSI slipping to 30.43, its lowest reading since the COVID-19 market crash. This naturally raises the question of how much deeper the correction could extend.

Looking ahead, the 22,850–22,800 zone is likely to act as the immediate support area for the index. A decisive break below 22,800 may trigger another leg of correction towards 22,500. On the upside, the 23,450–23,500 range is expected to act as an immediate resistance zone, where any short-term bounce could encounter fresh selling pressure.

Considering the oversold situation, what is the possibility of a sustained recovery in the market?

Given the current chart structure and weak momentum setup, any near term rebound, if it occurs, is likely to attract fresh selling interest, especially near resistance zones. Until the index shows signs of base formation, reduction in selling pressure, and improvement in momentum indicators, rebounds are expected to remain vulnerable.

After witnessing the biggest monthly fall since the Covid crash of 2020, will Bank Nifty decisively break the 53,000–52,000 zone next week?

The Bank Nifty, which represents the banking sector, has also undergone a notable correction in recent trading sessions and has clearly lagged the broader benchmark indices, indicating persistent selling pressure in major banking stocks.

Over the past week, the index has dropped close to 7%, and importantly, it has broken down from its rising channel on the weekly chart, suggesting that the medium-term trend has shifted from a phase of consolidation to one of weakness.

From its recent high of 61,678, the index has fallen nearly 13% in just 15 trading sessions, underscoring the sharp pace and magnitude of the decline. A fall of this nature within such a short period generally reflects aggressive position unwinding and rising risk aversion among market participants, particularly within the banking sector.

Technically, the overall structure continues to remain bearish. Going forward, the 53,400–53,200 zone is likely to serve as an important support region, as a horizontal trendline support is located around these levels. However, if the index breaks decisively below 53,200, it could intensify the downward pressure and potentially drag the index towards 52,500 and then 51,800 in the near term. On the upside, any short-term bounce or relief rally may encounter significant resistance in the 54,500–54,600 range, which could act as an immediate supply zone and trigger renewed selling.

Which two stocks would you pick for next week?

Aurobindo Pharma

Aurobindo Pharma has broken its horizontal trendline on the daily chart and shown strong follow-through, outperforming the Nifty as indicated by a sharply rising ratio line. RSI is above 60 and rising, signalling bullish momentum, while the stock has been riding the upper Bollinger Band, a characteristic of strong uptrends.

Price action and momentum indicators suggest the current uptrend is likely to continue, making the stock a key outperformer to watch in the near term. Hence, we recommend accumulating the stock in the zone of Rs 1,290-1,300 with a stop-loss of Rs 1,255. On the upside, it is likely to test the level of Rs 1,385 in the short term.

Coal India

Coal India has broken its horizontal trendline on the daily chart, overcoming the stiff Rs 455–460 resistance zone. Momentum indicators are supportive: RSI is trending higher, MACD is above zero, and its signal line, and ADX is rising, signalling a strengthening bullish trend.

Price action and technical signals suggest that the uptrend is likely to continue, positioning the stock as a near-term outperformer. Hence, we recommend accumulating the stock in the zone of Rs 465-470 with a stop-loss of Rs 453. On the upside, it is likely to test the level of Rs 500 in the short term.

Do you see confirmation of a bullish engulfing-type pattern in Syngene International next week?

Syngene International has posted a higher close after a minor pullback from Rs 400, but the stock remains well below key short- and long-term moving averages. Technical indicators suggest bearish pressure: RSI is just below 40, and DI- is above DI+ on the ADX, indicating bears are still in control. As long as it stays below the Rs 430-425 zone, the extension of a pullback is unlikely.

Do you see a pickup in buying interest in Muthoot Finance next week?

Muthoot Finance has successfully held above its 200-day EMA zone of Rs 3,200–3,250. Historically, the stock has seen strong buying from this zone, such as in May 2025, when it rallied nearly 100% over the next eight months.

RSI has reclaimed 40, signaling early bullish momentum, though MACD remains below zero and DI- is above DI+ on ADX. If the stock continues to hold above the 200-day EMA and momentum indicators improve, there is a high likelihood of pullback extension on the upside next week.

Do you expect further downside in the Nifty Auto index, or will Friday’s low act as support next week?

The Nifty Auto index has declined nearly 10% over the past three sessions, with major constituents such as TVS Motor, Bajaj Auto, Maruti Suzuki, M&amp;amp;M, Eicher Motors, and Hero MotoCorp slipping below their 200-day EMA, an important indicator of long-term support. From a technical perspective, momentum appears weak as the RSI has dropped below the 40 mark and continues to trend lower, while the ADX is rising, signalling strengthening downside momentum.

In addition, the Relative Rotation Graph (RRG) indicates that the sector is gradually losing relative strength against the broader market. Given these signals, investors should refrain from attempting to catch the bottom and instead wait for signs of stability — such as the RSI moving back above 40 or prices sustaining near key support levels. The next crucial support zone for the index lies around 23,400–23,300, which had acted as a floor in August 2025; a breakdown below this range could lead to additional selling pressure in the sector.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.

Chartist Talk: Sudeep Shah flags deeper correction risk as Nifty breaks 61.8% Fibonacci level; suggests two stocks

Broader indices remained under pressure for the third consecutive week; however, mid- and small-cap stocks relatively outperformed the benchmark indices amid weak global cues. The sentiment was weighed down by escalating US-Iran tensions, which pushed crude oil prices above $100 per barrel, along with persistent FII selling.

During the week, the BSE Sensex plunged 5.51 percent, or 4,354.98 points, to close at 74,563.92, while the Nifty50 declined 1,299.35 points, or 5.31 percent, to end at 23,151.10.

Among broader indices, BSE Largecap, Midcap, and Smallcap indices shed 5 percent, 4.5 percent, and 3.6 percent, respectively.

All the sectoral indices ended in the red, led by sharp losses in auto and banking stocks. Nifty Auto plunged 10.6%, Nifty PSU Bank fell 7.2%, Nifty Defence and Nifty Private Bank dropped 7% each, while Nifty Metal declined 6%.

&quot;In the last week, the benchmark indices corrected sharply. The Nifty ended down by 5.20 percent, while the Sensex declined by over 4,300 points. Among sectors, almost all major sectoral indices witnessed selling pressure at higher levels, but the Auto index lost the most, shedding over 10.50 percent. During the week, the market breached the crucial support levels of 24,000/79,000, and post-breakdown, selling pressure intensified,&quot; said Amol Athawale, VP Technical Research, Kotak Securities.

&quot;Technically, on daily charts, the market has formed lower highs and lower lows, and on weekly charts, it formed a long bearish candle, which is largely negative. We believe that as long as the market is trading below 23,400/75,000, a weak formation is likely to continue. On the downside, the market could continue its correction wave until 22,800/73,600. Further downward movement may also continue, potentially dragging the index to 22,600/73,000. On the other side, above 23,400/75,000, the pullback move could extend until 23,600-23,800/75,600-76,100.&quot;

&quot;For Bank Nifty, it corrected nearly 7 percent this week. In the near future, 54,500 will be the key level to watch. Below this level, it could slip to 53,000-52,500. Conversely, above 54,500, the pullback could extend to 55,500-55,800,&quot; he added.

Foreign Institutional Investors (FIIs) extended their selling for the fourth consecutive week, offloading equities worth Rs 35,052.03 crore, while Domestic Institutional Investors (DIIs) remained net buyers with purchases worth Rs 37,739.78 crore.

The BSE Smallcap index shed 3.6 percent during the week, with Aqylon Nexus, Silver Touch Technologies, SEPC, InfoBeans Technologies, Amber Enterprises India, PG Electroplast, Yasho Industries, Sapphire Foods India, Capacite Infraprojects, Sunteck Realty, Rain Industries, Network People Services Technologies, Dynamatic Technologies, and Precision Wires India fell by up to 22%, while Confidence Petroleum, Chemplast Sanmar, Jindal Poly Films, Happiest Minds Technologies, Apollo Pipes, Liberty Shoes, TTK Prestige, and VTM gained between 15% and 22%.


Where is the market headed?

Rupak De, Senior Technical Analyst at LKP Securities

Nifty continued to fall as the sentiment has not improved so far. The index continued to deviate further away from the 200DMA as the selling intensified. The RSI has entered the oversold zone. Though the trend remains weak, in times of extreme weakness, the market might continue to fall, keeping the RSI in a deep oversold zone.

In the short term, the trend might continue to remain weak, with any rise being sold into. On the lower end, the index might fall towards 23000/22800, while on the higher end, resistance is placed at 23400.

Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities

Going ahead, the immediate support for Nifty is placed in the 23000-22950 zone. Any sustainable move below this zone could result in Nifty extending its weakness towards 22750, followed by 22500 in the short term. On the upside, the zone of 23450–23500 zone is likely to act as a strong resistance.

Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities

The sharp downside momentum continued in the market for the third consecutive session on Friday, amidst the Middle East conflict and rising International crude oil prices, and Nifty closed the day lower by 488 points. After opening on a weak note, the market continued to slide lower for the better part of the session. Intraday upside recoveries in between have been used as a sell on rise opportunity.

A long bear candle has been formed on the daily chart, which made a new swing low of 23112 levels on Friday. Nifty has entered the support of the previous opening upside gap area of April 15, 2025, around 23,200-22,900 levels. Though Nifty is placed near the supports, there is still no confirmation of any bottom reversal pattern forming. This is not a good sign.

The underlying trend of the market is sharply down. There is a higher possibility of Nifty showing a minor pullback from near the lows of around 22900 by next week. If it fails to do so, then one may expect more weakness down to 22500-22000 levels in the near term. Immediate resistance is placed at 23500.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Smallcap index outperforms benchmarks despite 10-22% drop in several stocks

<img class="size-full wp-image-13860115" src="https://images.moneycontrol.com/static-mcnews/2026/03/20260314033449_fall.jpeg" alt="The escalating geopolitical tensions in West Asia pushed the Indian benchmark indices to their steepest weekly decline in nearly four years. Except for Tuesday’s session, the market ended lower on all other days amid weak global cues, continued rupee depreciation, persistent FII selling, and rising crude oil prices." width="1280" height="720" /> The escalating geopolitical tensions in West Asia pushed the Indian benchmark indices to their steepest weekly decline in nearly four years. Except for Tuesday’s session, the market ended lower on all other days amid weak global cues, continued rupee depreciation, persistent FII selling, and rising crude oil prices.

<img class="size-full wp-image-13860118" src="https://images.moneycontrol.com/static-mcnews/2026/03/20260314033654_Nifty_sensex.jpg" alt="During the week, the BSE Sensex plunged 5.51 percent, or 4,354.98 points to close at 74,563.92, while the Nifty50 declined 1,299.35 points, or 5.31 percent, to end at 23,151.10." width="1280" height="720" /> During the week, the BSE Sensex plunged 5.51 percent, or 4,354.98 points, to close at 74,563.92, while the Nifty50 declined 1,299.35 points, or 5.31 percent, to end at 23,151.10.

<img class="size-full wp-image-13860119" src="https://images.moneycontrol.com/static-mcnews/2026/03/20260314033712_sensex_nifty_sensexdown.jpg" alt="The BSE Smallcap index shed 3.6 percent during the week, with Aqylon Nexus, Silver Touch Technologies, SEPC, InfoBeans Technologies, Amber Enterprises India, PG Electroplast, Yasho Industries, Sapphire Foods India, Capacite Infraprojects, Sunteck Realty, Rain Industries, Network People Services Technologies, Dynamatic Technologies, Precision Wires India fell by up to 22%, while Confidence Petroleum, Chemplast Sanmar, Jindal Poly Films, Happiest Minds Technologies, Apollo Pipes, Liberty Shoes, TTK Prestige, VTM gained between 15% and 22%." width="1280" height="720" /> The BSE Smallcap index shed 3.6 percent during the week, with Aqylon Nexus, Silver Touch Technologies, SEPC, InfoBeans Technologies, Amber Enterprises India, PG Electroplast, Yasho Industries, Sapphire Foods India, Capacite Infraprojects, Sunteck Realty, Rain Industries, Network People Services Technologies, Dynamatic Technologies, and Precision Wires India falling by up to 22%, while Confidence Petroleum, Chemplast Sanmar, Jindal Poly Films, Happiest Minds Technologies, Apollo Pipes, Liberty Shoes, TTK Prestige, and VTM gained between 15% and 22%.

<img class="size-full wp-image-13860120" src="https://images.moneycontrol.com/static-mcnews/2026/03/20260314033736_stocks5.jpg" alt="The BSE Largecap index shed 5 percent with Polycab India, IDBI Bank, Meesho, Larsen &amp; Toubro, TVS Motor Company, UltraTech Cement, Mahindra and Mahindra, Eicher Motors, IndusInd Bank, Maruti Suzuki India, Tata Motors Passenger Vehicles, Varun Beverages, Tata Motors falling between 10-15 percent. " width="1280" height="720" /> The BSE Largecap index shed 5 percent with Polycab India, IDBI Bank, Meesho, Larsen &amp; Toubro, TVS Motor Company, UltraTech Cement, Mahindra and Mahindra, Eicher Motors, IndusInd Bank, Maruti Suzuki India, Tata Motors Passenger Vehicles, Varun Beverages, and Tata Motors falling between 10 and 15 percent.

<img class="size-full wp-image-13860121" src="https://images.moneycontrol.com/static-mcnews/2026/03/20260314033759_sensex_nifty_market_Nifty_nse_bse.jpg" alt="The BSE Midcap index declined 4.5 percent with KEI Industries, Bharat Forge, Ashok Leyland, Schaeffler India, Colgate Palmolive (India), The Ramco Cements, IDFC First Bank, Hexaware Technologies, Godrej Industries, APL Apollo Tubes falling between 10% and 15%.. However, gainers included Premier Energies, LT Technology Services, Aurobindo Pharma, Ipca Laboratories, Brainbees Solutions, Suzlon Energy, Dixon Technologies. On the other hand, Adani Total Gas, NTPC Green Energy, Coal India, Adani Power, ABB India, Tata Power Company advanced between 5-17 percent." width="1280" height="720" /> The BSE Midcap index declined 4.5 percent with KEI Industries, Bharat Forge, Ashok Leyland, Schaeffler India, Colgate Palmolive (India), The Ramco Cements, IDFC First Bank, Hexaware Technologies, Godrej Industries, and APL Apollo Tubes falling between 10% and 15%.. However, gainers included Premier Energies, LT Technology Services, Aurobindo Pharma, Ipca Laboratories, Brainbees Solutions, Suzlon Energy, and Dixon Technologies. On the other hand, Adani Total Gas, NTPC Green Energy, Coal India, Adani Power, ABB India, and Tata Power Company advanced between 5 and 17 percent.

<img class="size-full wp-image-13860122" src="https://images.moneycontrol.com/static-mcnews/2026/03/20260314033855_sensex_nifty_stock_markets.jpg" alt="During the week, State Bank of India saw the sharpest erosion in market capitalisation, followed by Larsen &amp; Toubro, HDFC Bank and Bajaj Finance. In contrast, NTPC, Power Grid Corporation of India and Sun Pharmaceutical Industries recorded gains in their market capitalisation. " width="1280" height="720" /> During the week, State Bank of India saw the sharpest erosion in market capitalisation, followed by Larsen &amp; Toubro, HDFC Bank, and Bajaj Finance. In contrast, NTPC, Power Grid Corporation of India, and Sun Pharmaceutical Industries recorded gains in their market capitalisation.

<img class="size-full wp-image-13860123" src="https://images.moneycontrol.com/static-mcnews/2026/03/20260314033929_nifty_market-Sensex.jpg" alt="All the sectoral indices ended in the red, led by sharp losses in auto and banking stocks. Nifty Auto plunged 10.6%, Nifty PSU Bank fell 7.2%, Nifty Defence and Nifty Private Bank dropped 7% each, while Nifty Metal declined 6%." width="1280" height="720" /> All the sectoral indices ended in the red, led by sharp losses in auto and banking stocks. Nifty Auto plunged 10.6%, Nifty PSU Bank fell 7.2%, Nifty Defence and Nifty Private Bank dropped 7% each, while Nifty Metal declined 6%.

<img class="size-full wp-image-13860124" src="https://images.moneycontrol.com/static-mcnews/2026/03/20260314033951_stock1.jpg" alt="Foreign Institutional Investors (FIIs) extended their selling for the fourth consecutive week, offloading equities worth Rs 35,052.03 crore, while Domestic Institutional Investors (DIIs) remained net buyers with purchases worth Rs 37,739.78 crore." width="1280" height="720" /> Foreign Institutional Investors (FIIs) extended their selling for the fourth consecutive week, offloading equities worth Rs 35,052.03 crore, while Domestic Institutional Investors (DIIs) remained net buyers with purchases worth Rs 37,739.78 crore.

<img class="size-full wp-image-13744692" src="https://images.moneycontrol.com/static-mcnews/2025/12/20251227024434_rupee-fall.jpg" alt="The Indian rupee extended losses for the second straight week, hitting a fresh record low of 92.47 against the US dollar in Friday’s session amid persistent geopolitical tensions. The currency ended the week near the all-time low at 92.45 on March 13, down 71 paise from 91.74 on March 6, trading within a weekly range of 91.74–92.47." width="1280" height="720" /> The Indian rupee extended losses for the second straight week, hitting a fresh record low of 92.47 against the US dollar in Friday’s session amid persistent geopolitical tensions. The currency ended the week near the all-time low at 92.45 on March 13, down 71 paise from 91.74 on March 6, trading within a weekly range of 91.74–92.47.

Markets suffer largest weekly fall in almost four years; rupee hits new low

Correction looks very much complete for large caps after ongoing bear phase amid Iran war-led oil risks, Believe large cap IT is attractive cash-rich deep-in-value contra buy for investors with horizon of 6-8 years, Strait of Hormuz blockage might not last beyond month of March 2026 as blockage impact almost every Asian country

* Correction looks very much complete for large caps after ongoing bear phase amid Iran war-led oil risks
* Believe large cap IT is attractive cash-rich deep-in-value contra buy for investors with horizon of 6-8 years
* Strait of Hormuz blockage might not last beyond month of March 2026 as blockage impact almost every Asian country

shorts/business/daily-voice-large-caps-past-worst-of-correction-mid-small-caps-face-more-pain-says-ametra-s-karan-aggarwal

According to Karan Aggarwal, the CIO and Co-Founder of Ametra PMS, corrections look very much complete for large caps after the ongoing bear phase amid Iran war-led oil risks. Dip over the last 2 months has pulled valuations down to lows of April 2025, which means markets have already been sufficiently punished for weak EPS growth, he said in an interview with Moneycontrol.

However, he feels midcap and small cap space still has some pain in store are still dealing with abnormally high valuations in the range of 25x-30x.

Meanwhile, he believes large-cap IT is an attractive, cash-rich, deep-in-value contra buy for investors with a 6-8-year horizon and the appetite to average out over multiple dips over the next 12-36 months. However, any investors looking for a quick rebound might be in for disappointment, he said.

Do you think the Strait of Hormuz could trigger an energy crisis if the tensions persist for long?

There is no doubt that a blockade of the Strait of Hormuz can trigger a global economic crisis, as it accounts for nearly 20% of daily global LNG and oil transportation. If one looks at history over the last 60 years, every single energy inflation spike – be it the 1970s or early 90s or 2003-2007 or early 2020s - has been a result of a supply shock on account of geopolitical events which have happened with a remarkable regularity.

As happened in the past, if Hormuz blockage becomes a permanent feature of our lives, there would be a short-term spike in inflation around the world and the world would move on in 12—18 months, rendering this passage either redundant or designing a workaround.

Do you expect any major changes in the oil and gas supply chain, or a significant shift toward alternatives to oil and gas, if the Iran war continues for months?

Blockage might not last beyond month of March 2026 as blockage impact almost every Asian country and extended blockage might warrant a direct military participation from multiple players. Having said that, Russia might end up as big winner in case of extended blockage, it has a well-established supply chain infrastructure across Asia and Europe capable of fulfilling the shortfall at short notice. In the worst-case scenario, the US and Russia can rise as global providers of energy security.

Every oil price spike cycle sparks conversations about the search for alternatives. The harsh reality is that the transition needs massive government subsidies and financial support, which are not available, as most government treasuries around the world are dealing with excessively high debt-to-GDP ratios and the prospect of high inflation, translating into high borrowing costs in the near-to-medium term.

Do you think the market is almost done with the correction, or could we see another 5–10 percent decline from current levels?

On technical levels and to some extent on fundamental levels as well, correction looks very much complete for large caps. Dip over the last 2 months has pulled valuations down to April 2025 lows, which means markets have already been sufficiently punished for a weak EPS growth profile. However, the midcap and small-cap space still has some pain in store and is still dealing with abnormally high valuations in the 25x-30x range.

Across global markets, Asia, the US, and Europe are trading at premiums to pre-April 2025 highs. As long as global markets continue to trade at a premium to pre-April 2025 highs, Nifty 50 must hold the bottom of 22,800 with market trading in the range 22,800-24,300 for the next few weeks.

However, any bullish reversal might have to wait for moderation in valuations across the broader market and clarity on geopolitical risks related to the Iran war.

Do you rule out further interest rate cuts by the RBI’s MPC in the current calendar year?

The last energy inflation cycle in 2022 forced both the Fed and the RBI to take a hawkish stance, which remained in place for 2 years until the 2nd half of 2024. Though domestic inflation is in a comfortable territory, the RBI would like to take stock of the evolving situation in global energy markets before taking a call that might create panic in a few weeks.

RBI has already done its job to a large extent over the last 12 months by sharply cutting CRRs and repo rates, raising liquidity in the market. Any further cuts, if they happen in the next few months, would be more of a reaction to a US recession or AI-driven mass layoffs, rather than independent policy decisions.

Do you believe IT companies could soon become attractive counter buys?

Even before the AI-linked selloff at the beginning of 2026, large-cap IT companies were undergoing a long period of consolidation, with hardly any returns for investors. Industry bellwethers like Infosys and TCS are trading at a 10-20% discount to the Nifty 50. As of today, IT companies are looking at a transition from the man-hour model to an outcome-oriented model.

We do not intend to underplay AI-linked fears around IT toplines and layoffs. Still, the fact remains that there is a realistic chance that, despite nearly a 50% cut in topline, IT businesses might come out of the AI transition with fatter margins and bottom lines, driven by cost efficiencies over the next 3 years.

Large-cap IT is an attractive, cash-rich, deep-in-value contra buy for investors with a 6-8-year horizon and an appetite to average out over multiple dips over the next 12-36 months. However, any investors looking for a quick rebound might be in for disappointment.

Could defence emerge as an interesting investment theme now?

A major overhang for most defence companies is valuation. Almost the entire order book has already been priced into the present price levels. On the other hand, the delivery and growth track record of defence plays has been underwhelming, with average EPS growth in the mid-single digits over the last 5 years, which is not very attractive considering that most stocks are trading at valuations of 50x or more.

Negative probabilities, such as order rejections, order cancellations, and failure to deliver, are not yet priced, which makes the risk/return proposition quite unattractive.

Unless defence companies can demonstrate their execution capabilities, it will always remain a theme defined by sentiment rather than fundamentals.

Which sectors would you prefer to buy during the ongoing correction?

We prefer to focus on sectors that are not closely tied to discretionary consumption and white-collar spending trends. Our focus is on selective buying in FMCG, IT, Power and Pharma sectors. Additionally, as and when opportunities arise, we would increase our exposure to capital goods and the infrastructure sector.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to consult certified experts before making any investment decisions.

Daily Voice: Large caps past worst of correction; mid-, small caps face more pain, says Ametra’s Karan Aggarwal

12 out of 18 years NIFTY NEXT 50 has given positive returns in March.

Type	R1	R2	R3	PP	S1	S2	S3
Classic	65,887.72	67,083.98	67,738.47	65,233.23	64,036.97	63,382.48	62,186.22
Fibonacci	65,940.22	66,377.00	67,083.98	65,233.23	64,526.25	64,089.47	63,382.48
Camarilla	64,861.10	65,030.75	65,200.41	65,233.23	64,521.80	64,352.15	64,182.49

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