Will stock market dips be positive for long -term investors? Geojit 'Vinod Nair emphasizes 10 reasons why | Einsmark news

After reversing reciprocal tariff measures, the domestic stock market produced a sharp recovery and increased by 14% within two weeks. In the midst of global sales, India has shown relative resilience, which has made the setback more robust and provides an opportunity for investors to lower their positions, as the world and domestic market is still cautious. Currently, the market seems to be in an overworked area, which takes the profits as investor sentiment begins to weaken. World markets remain uneasy and respond unpredictably to President Trump’s ambiguous and often controversial remarks. The US -China trade war has become irrational, which is expected to delay the growth of the global economy. Meanwhile, the hope of a resolution of the Russia Cocraine conflict remains far, and the relationship between Trump and Ukrainian President Zelensky is still behind. In the home, recent developments have provided little support. Financially, Q4 offers no good updates, with deep weakness in IT results under the threat of rates and high -lined rates. In contrast, the financial sector showed relatively stronger performance. Although FIIs recently resumed a modest daily inflow in Indian markets, their continuity remains uncertain due to the increasing border tension between India and Pakistan after the Pahalgam attack. India’s recent actions indicate possible retention measures ahead, contributing to a sense of caution among foreign investors. Both world and domestic status indicate the great possibility of a short-term correction, but these are the reasons for the dips that should be positive for long-term investors: 1. The recent shift in tone of President Trump indicates that the most intense phase of the tariff war can be behind us. Falling Trump ratings, increasing differences within the Republic Party, the subdued performance of the US stock market, the sale of US bonds and the deep drop in dollar prices put Trump under pressure to slow down or stop his tantrum. 2. At the same time, Trump’s rhetoric seems to have been strategic to create a sense of urgency among key countries such as Japan, South Korea and India to accelerate trade negotiations. But chaos between the largest trading partners has deteriorated. However, statements by Trump, the US Treasury Chief and the media indicate that the trade war between both partners could reduce in the future to reduce the heavy economic impact. 3. Both points may indicate that the slowdown in the growth of the global economy recently thinks by the economist, perhaps not pursuing. This is expected to reduce the effects on India that is with the benefit of a business shift with the rise of GCC. 4. Vance’s visit to India is an indication of the importance of the relationship with India, both trade and geopolytic. This is expected to be followed by Trump visiting India later this year, which revealed future transactions. 5. India is already in conversation with the US to finalize the FTA, and also the US with many other countries to establish rates nations face, which is expected to reduce or need to reduce future trade chaos. India will benefit from achieving a better and fast transaction and also placed on the low tariff list. 6. The external factors for India have become attractive as crude prices and commodity prices become cheaper, oil is at 3.5 years of lows. It is expected to facilitate fiscal costs (Beneficiary for INR) and input costs for corporate, which is an indication of an increase in the Ebitda margin in FY26 and FY27. 7. The rate reduction and liquidity -driven measures taken by the RBI are expected to increase India’s economy and financial market. Banks are the best performers in the market, which are expected to go well over the years, led by a reduction in cost and treasury profits, the maximum weight in the market. 8. During the consolidation of the Indian stock market since Sept 2024, the valuation of the stock market became attractive to long -term investors, especially large caps. Big caps perform better, which are expected to go well, led by the resilience of the Indian economy and stock market, as unveiled in the year. 9. For Mid & Small Caps, prices have become profitable for the long -term investors, but the valuation is still trading high due to subdued growth in FY25. The sentiment to the category has fallen and is expected to remain weak as the liquidity is beaten. This trend can turn around during the year as external risks subside, strong undercurrent of the domestic economy and reducing inflation that brings back the growth in earnings and as retail liquidity beans. A good time for persistent investors to drop it through congestion strategy. 10. India EPS is expected to grow 10- 12% in FY26. This is after the rapid slowdown in the FY25 growth to 5-6% due to the increase in inflation, decline in local demand due to disruption in government spending and the rural market affecting Ebitda. These issues are expected to stop in FY26. Although the recent imposition of tariffs has not yet significantly affected Indian exports, the global economic slowdown is still a concern – with signs that the associated risks are beginning to subside. First published: 27 Apr 2025, 23:37 IST