Indian equity markets showed resilience amid geopolitical tensions and oil price swings, suggesting investors believe the worst is priced in. Market expert Nischal Maheshwari advises a "buy on dips" strategy, noting a rotation from PSU banks to private lenders and cautioning on auto sector valuations.

Nischal Maheshwari advises buy on dips as markets stay resilient

Synopsis

Indian equity markets showed resilience amid geopolitical tensions and oil price swings, suggesting investors believe the worst is priced in. Market expert Nischal Maheshwari advises a "buy on dips" strategy, noting a rotation from PSU banks to private lenders and cautioning on auto sector valuations.

Despite a week dominated by geopolitical tensions and sharp swings in crude oil prices, Indian equity markets displayed remarkable resilience, reinforcing investor confidence that the worst may already be priced in.

Speaking to ET Now, market expert Nischal Maheshwari said the market’s ability to hold key levels even during periods of heightened global uncertainty indicates that investors are betting on an eventual resolution between Iran and the United States.

“The market is at the moment telling you that this is likely to get sorted,” Maheshwari said. He pointed out that even when crude oil prices surged sharply, benchmark indices did not crack below major support levels, suggesting that investors believe “this has been done and dusted” and that negotiations between the two countries are likely underway behind the scenes.

According to him, the current strategy for investors should remain simple — “buy on dips.”

Banking Space Sees Rotation Towards Private Lenders

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The banking sector, however, witnessed mixed reactions through the week, particularly after the earnings performance of State Bank of India disappointed investors.

Maheshwari acknowledged that there was visible disappointment in the numbers, although he added that a deeper assessment would require understanding management commentary and detailed disclosures.

Still, he believes the broader trend in financials is undergoing a transition.

“SBI has performed very well in the last one to one-and-a-half years. It is a good time to take away some profits and move to the largecap private sector banks now,” he said.

The expert noted that PSU banks have already delivered substantial returns over the past year, and investors may now find better value in private sector names such as HDFC Bank and ICICI Bank.

He highlighted that valuations in several large private lenders are currently attractive, especially with HDFC Bank trading near historically low price-to-book multiples.

Auto Sector Rally Faces Valuation Concerns

Among sectoral performers, automobiles and defence stocks stood out during the week. Yet Maheshwari sounded cautious on passenger vehicle makers after the sharp rally witnessed in the segment.

“Autos have run quite a bit,” he said, adding that the benefits from lower GST rates and favourable demand conditions appear to be largely priced in.

He also warned that interest rates may have already bottomed out globally, which could limit future demand momentum in the passenger vehicle segment.

Instead, he remains more constructive on commercial vehicles, where the cycle continues to strengthen steadily.

“The CV cycle is still picking up well,” he said, suggesting that commercial vehicle manufacturers could outperform passenger vehicle companies in the coming quarters.

Defence Stocks Regain Investor Attention

The defence sector, which has seen a meaningful correction in recent months, is once again appearing attractive to long-term investors.

Maheshwari noted that several defence companies have delivered strong quarterly numbers while also undergoing both time and value corrections in their stock prices.

“Some of these stocks are now emerging as good bets given that they have very strong order books,” he said.

The improving visibility of execution pipelines and sustained government focus on defence manufacturing continue to support the sector’s long-term outlook.

Energy Strategy Hinges on Crude Stability

The energy sector remains highly sensitive to developments in the Middle East, especially with crude oil prices hovering near the $100-per-barrel mark.

Maheshwari believes that if geopolitical tensions cool as expected, downstream energy companies could emerge as stronger investment opportunities.

He suggested investors gradually move away from upstream producers and instead focus on refining and marketing companies that stand to benefit if crude prices stabilize.

“The refining and marketing companies are the players I would play in the energy sector,” he said.

Real Estate Outlook Turns Cautious

While real estate stocks have staged a recovery in recent weeks, Maheshwari remains guarded on the sector’s medium-term prospects.

He warned that the global inflation trajectory could eventually push interest rates higher again, creating pressure on housing demand and financing costs.

More importantly, he flagged a structural concern surrounding the Indian IT sector and the growing impact of artificial intelligence.

“The bigger issue is how AI is going to impact the IT industry,” he said, adding that the technology sector has historically been a major driver of property demand in India’s urban centres.

“If things do not work out well there, I would be really cautious about the real estate sector,” Maheshwari cautioned.

As markets navigate a complex mix of geopolitics, inflation risks, and evolving sector leadership, investors appear increasingly focused on quality, valuation comfort, and earnings visibility rather than chasing momentum alone.

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Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today.

Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

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