Futile to predict future, stick to asset allocation dharma, says Kotak's Nilesh Shah amid market turmoil

Dalal Street went into a freefall on April 7, as panic-selling took the benchmark indices sharply lower.

The market, caught in the crossfire of an unpredictable tariff war, is struggling to find its footing. Every fresh development triggers a reaction, and the uncertainty has left sellers in an aggressive mood while buyers are hesitant to commit.

"It’s futile to predict how events will unfold," said Nilesh Shah, Managing Director of Kotak Mahindra Asset Management Company. "What investors can do is stick to their asset allocation dharma."

According to Shah, large-cap stocks are fairly valued and deserve a neutral allocation. But any correction should be seen as an opportunity. "Buy gradually as markets turn cheaper. That’s how you position to be overweight equities," he advised.

Amid the global noise, Shah believes domestic stories hold promise—especially sectors like cement, building materials, and consumer discretionary, which offer strong long-term potential.

He pointed to several tailwinds supporting consumption: tax rebates announced in the budget, reduced EMI burdens thanks to falling interest rates, a likely dip in oil prices, and the expected rollout of the eighth pay commission next year.

Indian equities witnessed a massive bloodbath in today's session. Dalal Street went into a freefall on April 7, as panic-selling took the benchmark indices sharply lower. Triggered by Donald Trump’s tariff tantrum on Wall Street, a wave of global jitters wiped out a jaw-dropping Rs 16 lakh crore in market value — the sharpest intraday collapse since June 2024. Inflation fears, a looming consumption crunch, and recession fears had investors running for cover as the Nifty and Sensex plunged deep into the red.

India VIX — the fear gauge of the domestic market — soared as much as 66 percent to 22.85 on April 7, marking its sharpest intraday spike since June 4, 2024, according to Bloomberg data. The dramatic surge has completely erased the downtrend that had been in place since the latter half of January this year.

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