'Stock markets will bounce back but...': Wisdom Hatch founder warns of higher inflation, faster rupee fall

Amid a sharp decline in Indian equity markets, Akshat Shrivastava, founder of investment education platform Wisdom Hatch, cautioned investors about the long-term implications of recent market trends. While expressing confidence in the market's recovery, Shrivastava highlighted challenges such as faster rupee depreciation and higher inflation.

"Our stock markets will bounce back. People are used to seeing an average 12-13% returns on NIFTY; this is unlikely to go away," he noted. However, he warned that these returns might not translate into significant real gains. "Despite seeing your overall portfolio rise by 12-13% (CAGR), your REAL returns would be 1-2%," Shrivastava said in a social media post.

His remarks come at a time when benchmark indices are experiencing severe losses. The Sensex plunged 1,235 points on Tuesday, hitting a more than seven-month low at 75,838.36, while the Nifty closed at 23,024.65 after losing 320.10 points. This sharp decline wiped out over Rs 7.5 lakh crore in investor wealth, driven by a combination of global tariff concerns and persistent foreign fund outflows.

"Domestic markets experienced a significant decline today, with heightened volatility," said Vinod Nair, Head of Research at Geojit Financial Services. He attributed the downturn to weak Q3 earnings, a depreciating rupee, and concerns about global trade policies.

Among major Sensex laggards were ICICI Bank, Reliance Industries, Zomato, and Adani Ports, with Zomato witnessing the steepest drop at 10.92% following disappointing Q3 results. Sectors like real estate, consumer durables, and power bore the brunt of the selloff, declining between 2.5% and 4.2%.

Shrivastava advised investors to delve deeper into understanding the long-term implications of inflation and currency depreciation on their portfolios. "If you don't understand this, you really need to spend time researching and learning more about the long-term implications this trend is going to have on your investments," he urged.

The market volatility comes amid reports of foreign institutional investors (FIIs) offloading Rs 4,336.54 crore worth of equities in a single day. Analysts believe rising US bond yields and uncertainties surrounding global trade policies could exacerbate outflows and impact domestic markets further.