Business As Usual For Indian Stock Market, Says Maneesh Dangi Amid Ongoing Correction

Systematic investment plans can help investors navigate current market conditions, according to Maneesh Dangi. (Representative image. Source: Envato)

While the ongoing phase of correction in the equity market has sparked concern, market analyst Maneesh Dangi is of the view that there is nothing unusual, and the recent trends are part of a natural market cycle.

"Every three or four years, Indian markets see a 20% cut, which is what you call bear markets. It's been really long since that has happened. If it happens, markets are doing the usual; there is nothing unusual happening," Dangi, founder of Macro Mosaic Investing and Research, said while speaking to NDTV Profit.

The past four to five years delivered exceptionally high returns for investors, Dangi noted, but also said that before Covid-19 pandemic, Indian earnings did struggle quite substantially for around eight to nine years. The nominal gross domestic product growth used to be only about 10% during that period, he added.

"You should expect less than average returns over the next three or four years if you enter all in here," the analyst said, adding that valuations remain expensive, though not excessively so, as compared to levels seen four to five months ago.

Maneesh Dangi, founder of Macro Mosaic Investing and Research. (Photo source: NDTV Profit)

On the currency front, Dangi addressed the rupee's challenges against the dollar. "The global macro is very bad, given the strength of the dollar and high interest rates in the US," he noted.

He explained that while Indian equities have delivered robust returns in rupee terms, dollar-adjusted returns have been modest at 12-13% over the past three years. "The froth is more in rupee terms, not in dollar terms because dollar returns in Indian equity did not deliver as much," he added.

For investors, Dangi emphasised the importance of disciplined investing amid ongoing volatility. "The only defence for 99% of people is to be disciplined in investing through some systematic manner," he said, advocating for the continuation of systematic investment plans or SIPs.

According to Dangi, SIPs can help investors navigate current market conditions and secure a 4-4.5% premium over bonds on average for the capital invested over the next three to four years.

Dangi noted that while markets might disappoint at current valuations, there is no cause for alarm. "There is nothing unusual happening," he reiterated.