Expert view: Increased retail participation may drive a re-rating in valuations, says Green Portfolio PMS co-founder
We expect Indian equity markets to touch new record highs in the coming months, supported by strong domestic growth and resilient investor sentiment.
However, global uncertainties are rising, and investors should remain cautious about valuations.
It is important not to overpay for stocks and to regularly monitor company fundamentals.
With the world moving towards de-globalisation, sectors like energy, manufacturing, and commodities are likely to play a bigger role in driving market performance.
Investors should stay selective and focus on quality businesses as the market landscape evolves.
While the India-US trade deal may take time and go through several negotiation phases, Indian markets are largely driven by domestic factors and retail investor participation.
Although global developments can cause short-term volatility, India's strong economic fundamentals and long-term growth prospects should help cushion any negative impact.
We believe India is well-positioned to deliver stable growth and should not be excessively volatile due to external negotiations.
While the India-US trade deal may take time and go through several negotiation phases, Indian markets are largely driven by domestic factors and retail investor participation.
Although global developments can cause short-term volatility, India's strong economic fundamentals and long-term growth prospects should help cushion any negative impact.
We believe India is well-positioned to deliver stable growth and should not be excessively volatile due to external negotiations.
Given the current high uncertainty, it is advisable to prioritise value stocks with growth potential over chasing momentum for quick gains.
Value investing offers more stability and lower volatility, especially during unpredictable market phases.
While momentum strategies delivered strong returns in 2024, they are facing challenges and reversals in 2025 due to increased volatility and stretched valuations.
Historically, value stocks tend to outperform after periods of market correction and provide a cushion during downturns.
Focusing on fundamentally strong, reasonably valued companies is a safer approach for navigating the present market environment.
Commodities, manufacturing, mining, energy should do well overcoming one to two years.
We will be going towards de-globalisation, and these are important resources which will become more important.
Manufacturing will help us in the direction towards de-risking from countries like China.
India's investor base crossing the 22 crore mark is a remarkable milestone and is fundamentally changing the nature of the stock market.
With such a strong influx of retail investors, domestic liquidity in the market has increased significantly, making Indian equities less reliant on foreign capital and more stable during global shocks.
What's really interesting is that investor behaviour in India is almost like a religion; it's a cult in itself.
People look for ideas and stories that emotionally connect with them, and once they find them, they follow them with conviction.
This means many retail investors are naturally drawn to chasing short-term trends and momentum, even if the actual money to be made is limited.
Still, this structural shift in the market is powerful. The sheer participation of retail investors is likely to drive a re-rating in valuations for many companies, making the Indian market more resilient, dynamic, and truly reflective of domestic sentiment.
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Read more stories by Nishant Kumar
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
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