Stuck during market correction? Siddhartha Khemka on Nifty targets, investing strategy and more

The stock market is undergoing a big correction, falling for the seventh consecutive week — the longest since the Covid-19 pandemic period. Elevated crude oil prices, surging US Treasury yields and persistent foreign fund outflows have made sentiment worse for investors. Nifty is down 13% and Sensex has lost 14.5% this year, triggering moderation in outlook for the benchmark indices.

As investors grapple to protect their capital and sit on the edge to ascertain market direction, BTTV spoke to Siddhartha Khemka, senior Group Vice President - Head of Research (Retail), Motilal Oswal Financial Services to find out the outlook of the Indian stock market.

Khemka said Nifty could recover to 25,000-26,000 by FY27-end. He expects the market to consolidate and potentially recover towards the 23,000–24,000 zone by year-end. In the current session, Nifty trades around 22,782, down 356 pts against the previous close.

Khemka is in favour of being selective rather than buy the entire mid- and small-cap universe. Khemka said the mid and small-cap space remains a mixed bag, with domestic manufacturing emerging as a key theme. 

He said banks and NBFCs could face pressure during a rate-hike cycle and advised against fresh buying in the space at the current juncture. NBFCs have seen sharp rally in the last one or two years. Hence, they are likely to correct.

Commenting on the outlook of the market, Khemka said market could remain sideways in the next three months.

He suggested that a correction in the market could provide an opportunity for long-term investors who are looking beyond at least one to two years. According to Khemka, this is a good opportunity to accumulate.

In the current scenario, investors can consider pharma sector. He mentioned IT and FMCG sector stock which can be considered during the market correction.

A weak rupee could also benefit pharma companies, he added.

Khemka advised investors to focus on companies that are more domestic-oriented and relatively less exposed to inflationary pressures.