Long-term investors should add exposure in phases during market declines, while traders should stay out due to ongoing uncertainty, market expert Nischal Maheshwari said.
He said current conditions favour gradual buying over lump-sum investments, with volatility driven by global developments continuing to weigh on sentiment.
The comments come as the NSE Nifty 50 has declined 12.5% so far this year, with pressure linked to domestic factors such as the securities transaction tax increase and global risks including tensions in the Middle East and a weaker rupee. Maheshwari said the market has already factored in several risks, including slower economic growth and weaker earnings expectations.
"It's a volatile market," he said. "If you are a long-term investor, then maybe the valuations are interesting at these levels and every down price from here, basically one can keep on accumulating in smaller batches," Maheshwari told NDTV Profit in a televised interaction.
He added that investors should spread investments over declines rather than trying to time the bottom. "If one has to spend 100 rupees, every 15 rupees one can do with 200-300 point fall," he said.
Maheshwari said short-term traders should avoid the market amid frequent swings. "If you are a trader, I think this is the best market to be avoided," he said. "There is no point on doing."
He said only short-side trades may work in such conditions but reiterated that staying out is the better approach. "I think the best thing is to avoid the market for the moment," he said.
Limited Downside
Maheshwari said the scope for further decline appears limited from current levels.
"From here onwards, maybe there is another 5% downside in the market, maybe seven," he said, adding that valuations would adjust even in that scenario. He said markets have already adjusted to lower expectations for economic growth. Estimates have been cut from around 7.5% to about 6.7-6.8%, while earnings growth projections have also moderated.
"I think quite a bit of it is baked in," he said.
Macro View
On inflation, he said price pressures may rise but remain within a manageable range.
"I see the number may be going up to four and a half percent, which is okay," he said.
He added that the Reserve Bank of India is unlikely to raise rates at this stage given the inflation trajectory.
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