Market between fear and opportunity: Experts reveal where investors should put money now

India’s stock market is currently moving between optimism and caution as investors continue to track global tensions, crude oil prices and corporate earnings. However, market experts believe strong domestic fundamentals and better-than-expected earnings are helping maintain confidence in Indian equities.

Speaking in separate discussions with business journalist Anil Singhvi, Dinshaw Irani and Feroze Azeez shared their views on the market outlook, sector opportunities and long-term investment strategy.

Both experts said volatility may continue in the near term, but India’s long-term growth story remains intact.

Corporate Earnings Supporting Sentiment

Irani said the recent earnings season has surprised positively despite concerns over geopolitical tensions and rising commodity costs. According to him, many analysts had expected weak numbers because of higher crude oil prices and uncertainty in global markets. However, several companies reported resilient earnings growth.

“We expected earnings growth in early double digits, but now growth appears closer to the mid-teen range,” Irani said. He added that Indian companies, including oil and gas firms, managed input costs better than expected through efficient sourcing strategies.

Irani believes that if global tensions ease and demand conditions remain stable, the June quarter may also deliver healthy results.

Crude Oil Remains a Major Concern

Azeez said rising crude oil prices remain one of the biggest risks for markets and the broader economy. “Oil is definitely creating tension for markets,” Azeez said.

He noted that crude oil prices have stayed above USD 100 per barrel for longer than expected. According to him, his earlier estimate for average crude prices during the financial year was around $85-87 per barrel.

However, he said historical data provides some comfort. Azeez explained that his team studied 14 major instances since 1973 where oil prices rose more than 50 per cent.

“In 12 out of 14 cases, oil prices corrected nearly 28-30 per cent within the next year,” he said. He added that only during exceptional periods, such as the post-COVID recovery and the recovery after the Global Financial Crisis, did oil prices remain elevated for a longer period.

India Still Attractive for Global Investors

Irani said India remains an attractive market despite underperforming some other emerging markets this year. According to him, the recent correction has improved valuations and made Indian equities more appealing for long-term investors.

He said domestic inflows continue to remain strong, while foreign institutional investors may gradually increase participation if global conditions stabilise.

“Reasonable valuations and stable earnings growth are providing comfort to investors,” he said. Irani also highlighted India’s advantage over markets such as Taiwan and South Korea, where a few technology and semiconductor companies dominate benchmark indices.

He said India offers better sectoral diversity and more balanced investment opportunities.

FIIs Returning After Heavy Selling

Foreign Institutional Investors (FIIs) have started selective buying after months of heavy selling in Indian equities. Irani clarified that this may not yet indicate a complete shift in foreign investor sentiment, but valuations are becoming increasingly attractive.

According to him, weak market performance and the falling rupee had earlier discouraged foreign investors. However, after the correction in Indian equities, some global investors are slowly returning.

Azeez also pointed out that FIIs continue to maintain meaningful ownership in India’s small-cap segment. “FIIs have not completely exited India. Small-cap ownership has remained stable,” he said.

AI and Technology Stocks May Consolidate

On the global Artificial Intelligence (AI) theme, Irani said AI remains a powerful long-term opportunity, but valuations in semiconductor and AI-linked stocks have become stretched.

He believes some cooling and consolidation may happen after the sharp rally in global technology stocks. At the same time, Irani expressed caution regarding the recent rebound in Indian IT services companies.

According to him, some of the rally may be driven more by sentiment and oversold conditions rather than strong institutional conviction. “AI is the future, but investors may still witness phases of correction and consolidation,” he said.

Mid and Small Caps Continue to Perform Well

Both experts remained positive on the mid-cap and small-cap segments. Irani said earnings growth in many mid- and small-cap companies has remained stronger than that of large-cap firms despite fears of slowing demand.

He added that the correction seen earlier in these segments helped remove excessive valuations and created fresh opportunities for investors.

“The fundamentals are supporting the recovery in mid- and small-cap stocks,” he said. Azeez also advised investors not to fear volatility in smaller companies and suggested flexi-cap and multi-cap mutual funds as suitable investment options.

Government Spending Themes in Focus

Azeez believes investors should focus on sectors linked to domestic government spending due to ongoing global uncertainty. He said infrastructure, defence, manufacturing and agriculture-related sectors could perform well over the next six to 12 months.

“The government’s spending pipeline remains very strong,” he said. According to him, infrastructure spending of nearly Rs 11 lakh crore may support roads, metros, airports and power projects.

He added that capital goods, EPC companies, cement and power-related businesses may benefit from the infrastructure push.

Defence, Manufacturing and Agriculture Seen as Key Areas

Azeez also highlighted defence as a major opportunity area due to rising domestic procurement and government spending. He said defence spending of around Rs 1.7 lakh crore could support shipbuilding, defence electronics and manufacturing companies.

Apart from defence, he sees strength in agriculture-linked sectors such as agri-inputs, tractors and auto components because of continued government support.

“These are themes for the next six months to one year,” he said. He clarified that his current recommendations are based on near-term market conditions and not only long-term structural trends.

Long-Term Investing Still the Best Strategy

On investment strategy, both experts advised investors to remain disciplined and avoid panic during volatile periods. Azeez said investors should continue systematic investments and focus on sectors supported by domestic growth.

He also argued that while gold has delivered strong returns recently, diversified equity mutual funds and small-cap funds have historically created greater long-term wealth.

“Gold is not the only asset that creates wealth,” he said. Irani similarly maintained that India’s growth story remains strong despite global uncertainty.

According to both experts, investors who stay patient and focus on quality sectors linked to India’s economic expansion are likely to benefit over the long term.