According to Mint, Devarsh Vakil, Head of Prime Research at HDFC Securities, believes that markets are likely to remain volatile in the near-term, though the most severe phase of the correction appears to be over for now. The expert notes that near-term direction will depend on how geopolitical tensions evolve, crude oil stays contained, and whether foreign fund flows remain stable. Vakil emphasizes that the worst part of the correction appears to be behind us for now, with the earnings season so far being broadly better than feared, with companies delivering results that are largely in line or modestly better-than-expected.
As reported by The Economic Times, JM Financial's Ashish Chaturmohta expects that selective investors in small and midcap stocks are quietly generating significant alpha beneath the surface of stagnant benchmark indices. According to Mint, the market registered a sharp bounce in April 2026, with the Nifty Microcap250 and Smallcap100 indices surging by over 28% and 25% respectively, compared to an advance of around 11% in the Nifty. The primary reason behind large-cap underperformance has been the withdrawal of liquidity by FIIs from Indian equities, with the market finding support largely from domestic institutions and retail investors who typically prefer mid-caps over the FII-dominated large-cap segment.
According to Mint, Vakil advises against a blanket 'buy on dips' strategy in favour of a highly selective accumulation approach. He warns that in an uncertain geopolitical environment, corporate profit margins across many sectors will be squeezed over the coming quarters, making a generic approach to buying market corrections highly risky. The expert recommends that investors must pivot from a broad-market strategy to a tactical, sector-specific playbook, focusing on export-oriented sectors like Pharmaceuticals and Speciality Chemicals that act as natural hedges because they earn revenues in US Dollars, meaning a weaker Rupee actively boosts their margins. He suggests keeping core exposure in large caps and adding mid and small caps only through high-quality names.
As reported by Mint, opportunities are most compelling in Defence, Pharmaceuticals, IT, FMCG, Infrastructure, Cement, and Real Estate - though stock selection remains the operative discipline. The Defence and Aerospace sector stood out with companies reporting strong results underpinned by multi-year order visibility, while Pharmaceuticals remain a favoured sector, though conviction is selective, with currency tailwinds offering a meaningful operating offset. According to The Economic Times, Chaturmohta notes that it is more stock-specific and thematic opportunities which look very promising at the current juncture, rather than broad index bets. The capital goods sector continues to benefit from the electrification and energy transition wave, with companies like Siemens Energy, Hitachi, and GE Vernova having order books extending to 2030.
According to Mint, FIIs have maintained aggressive short positions in the index futures segment, with the long-to-short ratio falling to as low as 0.14, suggesting a strong possibility of mean reversion or short covering in the coming weeks. The expert notes that history shows that wars and geopolitical shocks have often created attractive opportunities for long-term investors who used market corrections to accumulate quality assets. However, he emphasizes that the structural long-term growth story of the Indian economy remains robust, but the immediate climate demands that investors halt large lump-sum deployments, utilise staggered Systematic Investment Plans (SIPs), and focus on companies with a strong balance sheet and pricing power. As per The Economic Times, JM Financial's Chaturmohta expects Indian stock markets to trade in a broader range between 23,000 at the lower end to 24,500 on the higher side.
