Indian markets geared up for a volatile session on Thursday. Both benchmarks traded nearly flat as markets opened for trading today. The BSE Sensex started trading at 81,403, slipping 22 points, while the NSE Nifty50 began the day at 24,972, inching lower by 1.30 points.
Notably, both benchmarks, Sensex and Nifty, bled in the pre-open session, indicating the sentiment prevalent in the markets. The GIFT Nifty also signalled a mixed day ahead for investors.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments, highlighted a noticeable divergence in equity performance between India and global peers. While markets such as the US, Taiwan, and Korea are scaling fresh highs, the Nifty remains 4.4 per cent below its peak recorded in September 2024.
According to him, this lag is largely a result of valuations adjusting after a prolonged phase of heavy domestic capital inflows. “Now the largecaps are fairly valued, but the mid and smallcaps, particularly the latter, continue to be overvalued,” he noted.
Vijayakumar pointed out that India’s macroeconomic fundamentals remain strong, supported by sweeping reforms introduced this year, especially the changes in GST. These policy shifts, he believes, have placed the economy “on the cusp of a breakout growth.” However, he flagged the uncertainty surrounding US-imposed tariffs as the main external risk. Encouragingly, the recent tone of both President Trump and Prime Minister Modi suggests the issue may be heading towards resolution.
Looking ahead, he expects the markets to start pricing in stronger earnings momentum from FY27. From an investment standpoint, he emphasised that “fundamentally, safety is in largecaps,” indicating that these stocks are likely to provide more stability compared to the still-expensive mid and smallcap segments.
