Last Updated on March 15, 2025 by Sandeep
“Peak Panic May Still Be Ahead” – Nuvama Report Warns of Prolonged Market Uncertainty
Global risks, weak earnings revival, and US slowdown add pressure to Indian equities
New Delhi, March 15: Despite low volatility in the domestic stock markets over the past few months, investors remain cautious following a prolonged correction streak in the Indian equity market, according to the latest Nuvama report.
“Nifty has declined by 15% over the past five months, marking the longest correction streak since September and the worst post-COVID. Despite this, low volatility suggests that peak panic may still be ahead,” the report cautioned.
While India’s valuation premium over other emerging markets has dropped to 50% from 70%, aligning with historical averages, broader concerns loom over global economic conditions.
Key Market Trends & Global Risks
Global Slowdown Impact
- The US economy is showing signs of strain, with Q1 2025 GDP projections slashed to 0.5% from 3.8%.
- Concerns over Make America Great Again (MAGA) tariffs and Department of Government Efficiency (DOGE) spending cuts could fuel inflation or even trigger a recession in the United States.
Emerging Market Currency Pressure
- A weakening job market in the US is adding to the risk-off sentiment, potentially leading to weakness in emerging market currencies, including the Indian Rupee.
Stock Market Bottoming Remains Uncertain
- The earnings revival appears distant, with weak demand and fading margin tailwinds dragging down investor sentiment.
- Policy easing is limited, with elevated bond yields restricting monetary flexibility, making it unclear when the market will bottom out.
Market Bottoming: A term used to indicate when the stock market has reached its lowest point before an upward trend begins.
Indian Markets React to Global & Domestic Cues
Indian stock markets have exhibited mixed sentiments, with investors reacting to both global and domestic economic developments.
- On March 13, markets ended on a negative note, with the Nifty closing at 22,397.20, down 73.30 points (0.33%).
- Analysts suggest that investors will remain cautious in the coming weeks, closely monitoring international economic conditions and domestic policy decisions.
“Investors are carefully weighing both domestic and international factors to assess market direction. With global uncertainties at play, caution will remain a key strategy,” said market analysts.
What Lies Ahead?
With uncertainty prevailing, investors should expect:
Increased market volatility despite low panic levels. Careful stock selection amid unclear earnings revival. Impact of US recession fears on global market sentiment. Fluctuations in emerging market currencies, including the Rupee.
As the equity markets continue to navigate global uncertainties, experts suggest that market participants should adopt a disciplined approach, focusing on long-term strategies while remaining vigilant in the short term.
