Nifty may fall another 5%? Market expert flags key risks for Dalal Street

Indian equity markets could face further downside in the near term amid global uncertainties, elevated crude oil prices and sustained foreign investor selling, even as domestic indicators -- a strengthening rupee and record mutual fund inflows -- offer some support.

Sameer Dalal, President of Natverlal & Sons Stockbrokers, told Business Today that Nifty could see another 5 per cent downside in the short term. The market expert flagged uncertainty over potential US tariff action linked to Russian oil, along with volatile crude oil prices and shipping costs, as key risks for the domestic market.

Dalal also highlighted liquidity as a key concern. If markets decline further and mutual fund returns turn negative, investor confidence could weaken, potentially slowing systematic investment plan (SIP) inflows and prompting higher redemptions. Such a trend could put both foreign institutional investors (FIIs) and domestic institutional investors (DIIs) on the selling side, adding to market pressure.

Despite the near-term risks, Dalal maintained that India's long-term investment story remains intact.

He advised investors to deploy money progressively, remain cautious and focus on fundamentally strong stocks rather than taking aggressive positions amid heightened uncertainty.

Meanwhile, domestic benchmarks declined on Monday, giving up their initial gains after rebounding in the previous session.

The 30-share BSE Sensex pack slumped 547.65 points or 0.76 per cent to close at 71,924.68, while the NSE Nifty index slipped 157.10 points or 0.70 per cent to settle at 22,363.35.

Broader indices were largely stable, with Nifty Midcap 100 edging up 0.08 per cent and Nifty Smallcap 100 climbing 1.42 per cent.