Stock Market: Important Period For Investors To Focus On Long-Term Opportunity

New Delhi: Despite the short-term sell-off, the combination of strong macro fundamentals, robust earnings growth, and attractive valuations makes this an important period for investors to focus on the long-term opportunity rather than the immediate volatility, according to market watchers. On the macro front, conditions remain stable. Fiscal deficits are under control, tax cuts are expected to boost consumption, inflation is low at 4.31 per cent, and rate cuts have started, which should support economic growth.

“Domestic investors continue to pump money into mutual funds, offsetting some of the foreign selling pressure. While it is impossible to predict an exact market bottom, excessive negativity often signals a turning point,” said Krishna Appala at Capitalmind Research.

The GDP growth accelerated to 6.2 per cent in the third quarter (October-December) of 2024-25, up from a revised figure of 5.6 per cent in the second quarter of the financial year. The GDP growth rate for the financial year 2024-25 is now estimated at 6.5 per cent while the economic growth rate for 2023-24 has been revised to a 12-year high of 8.2 per cent.

India’s Q3 FY25 GDP data met expectations, with a slight upward revision to 6.5 per cent for the fiscal year, according to experts. The agriculture sector posted steady growth in Q3, indicating a likely improvement in the kharif crop, which could support rural consumption.

“Investors will be closely watching key upcoming events, including the tariff policy, U.S. Core PCE Price Index, and jobless claims. In the near term, market conditions are expected to remain weak, with a gradual recovery anticipated as earnings improve from Q1 FY26 and global trade policy uncertainties subside,” said Vinod Nair, Head of Research, Geojit Financial Services.

Markets do not move in a single direction forever, experts added. Meanwhile, the confluence of a favourable fiscal policy that supports both capex and consumption and easing monetary policy across all its levers — rates, liquidity and regulations and robust services exports – that augur well for the job market outlook are likely to aid the growth momentum for India, a Morgan Stanley report has said.