However, leading global analysts believe that this correction presents a strategic buying opportunity rather than a crisis.
Speaking to ET Now, market experts, including Christopher Wood of Jefferies, Vivek Paul of BlackRock Investment Institute, and Jim Walker of Aletheia Capital, have reaffirmed India’s position as the best long-term investment destination. Despite near-term pressures, India’s structural economic growth, policy stability, and favorable demographics remain intact, making it a preferred bet for long-term investors.
While China is gaining attention as a tactical trade, India remains the most compelling structural story in Asia.
Here’s how these experts weigh in on India’s market trajectory:
Christopher Wood: India’s correction is technical, not structural
Christopher Wood, Global Head of Equity Strategy at Jefferies, acknowledged the recent market downturn but emphasized that it was largely driven by technical factors rather than any fundamental macroeconomic weakness.Speaking to ET Now, he stated, “This correction is primarily driven by technical factors in terms of compression of valuations, most particularly in the midcap area, it is not driven by any major macroeconomic problem.”Wood highlighted that the supply of equity caught up with demand, especially in the midcap space, as Indian corporates took advantage of high valuations to raise capital. Additionally, the Reserve Bank of India’s (RBI) liquidity tightening measures contributed to the correction.
Despite the decline, Wood reiterated his bullish long-term stance on India, saying, “I still believe India is the best structural story in Asia and in fact globally.” He also pointed out that while foreign selling had already been large, India had corrected before US markets started showing weakness, which could cushion further downside risks.
Also read: Booster shot to Indian defence sector from European Commission’s ReArm plan: HAL, BEL among 6 stocks to buy
Vivek Paul: Foreign investors still favor largecaps in India
Vivek Paul, Senior Portfolio Strategist at BlackRock, echoed similar sentiments, emphasizing that India’s structural opportunities remain intact. “If we were thinking for anybody with an investing horizon 5, 10 years out, we would be building portfolios today…where you would hold a greater allocation than a benchmark weight,” he stated in his ET Now interview.
While he acknowledged cyclical challenges such as global uncertainty, liquidity constraints, and consumption slowdown, he argued that valuations in Indian largecaps are not as expensive as they seem when factoring in future earnings growth. “If I were to try and think, well, what are earnings going to be in the future?” he asked, suggesting that forward-looking valuations make Indian equities attractive.
Paul also noted that India remains a stock picker’s market, stating that “this is a case where momentum can be now measured in hours rather than days and weeks.” This high volatility presents both risks and opportunities, particularly in financials and discretionary consumption stocks, which are seeing a shift in domestic portfolios post-budget.
Jim Walker: India offers policy stability and growth potential
Jim Walker, Chief Economist at Asianomics, took a more macroeconomic view, highlighting India’s policy stability and government-led economic reforms. In his discussion with ET Now, he asserted, “India looks better to me now than at any time in the last 30 years in terms of policy stability and policy certainty.”
Walker pointed out that India’s macroeconomic fundamentals remain strong, unlike the US, where excessive fiscal deficits and tariff-driven uncertainties pose risks. He stated, “The real problems lie in the advanced economies in America…while money is flowing back into America, I think that is a bad move.”
He also advised long-term investors to double down on India, emphasizing that while concerns over valuations exist, earnings growth will soon support current price levels. “My view is that economic growth is going to take off from here and those valuations will be very quickly supported by corporate earnings,” he concluded.
Conclusion: A short-term correction, a long-term opportunity
While Indian equities have experienced a sharp correction, leading analysts agree that this is a mid-cycle adjustment rather than a prolonged downturn. Factors like a weaker US dollar, RBI’s potential easing measures, and government-led economic reforms provide significant upside potential for long-term investors.
With largecaps now offering a favorable risk-reward ratio, investors looking beyond short-term volatility may find this correction as the perfect entry point into India’s growth story. As Jim Walker aptly put it, “This is the time to absolutely double down on India.”
Also read: Expect a tumultuous market for rest of this month and first few days of April: Deepak Shenoy
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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