Speaking to ET Now, Balasubramanian pointed out that while uncertainty—ranging from geopolitical conflicts to unpredictable global leadership cues—continues to cloud sentiment, there are early signs that the worst may be nearing an end, at least in the near term.
“So, the way events are panning out, I think that itself tells that probably the worst should come to an end at least in the near term, short term I am saying. Though earlier the uncertainty was growing beyond our imaginations, at least some semblance is coming and hopefully we should expect in the next two-three weeks some agreement being reached between these two large nations and therefore bring some kind of uncertainty to a normalcy, then we will have to see some kind of stabilisations.”
He added that while a full resolution may take a few months—especially with oil prices and global trade dynamics needing time to normalise—the market may already be factoring in much of the bad news.
From a domestic perspective, Indian equities have undergone a prolonged phase of correction. This, according to Balasubramanian, has brought valuations to more reasonable levels, creating a potential opportunity for long-term investors.
“Today valuation-wise if you look at Nifty, if you take the valuations, it is now trading at below the long-term average PE multiples that is one.”
He also highlighted encouraging trends in the financial sector, particularly the revival in credit and deposit growth, which had been sluggish last year.”So, we are seeing clearly the credit growth now is coming back to normal. Last year the credit growth was missing. Deposit growth was also missing. Now, both are actually now catching up.”
While near-term disruptions—especially from elevated oil prices—remain a concern, Balasubramanian believes markets tend to price in such risks ahead of time.
“Correct. So, generally market discounts some of these expectations pretty in advance.”
He noted that while companies may report strong earnings for the March quarter, the real impact of higher oil prices is likely to show up in the June quarter results.
“But I would assume while the March quarter for most of the companies would report good numbers, there is high probability the assumption that we are saying that oil impact would get definitely felt in the June quarter.”
Even so, he suggested that much of this anticipated pressure is already reflected in stock prices, limiting downside surprises.
On the investor front, retail participation remains resilient despite market volatility. Flows into mutual funds have held steady, and there is a growing debate among investors on whether to stick with systematic investment plans (SIPs) or deploy lump sum investments at current valuations.
“In the month of March I would say more or less flows remain stable… I would say close to about the previous flows that continues.”
Balasubramanian indicated that periods of correction often present favourable entry points for lump sum investments, though discipline remains key.
“My own belief is as you rightly put it most of investors have come in the last say two years or three years or four years have not seen this kind of fall, for them it is a lesson, for them it is a learning because the market is always up and down.”
He emphasised that volatility is an inherent part of investing and serves as an important learning curve, especially for new entrants who may be experiencing their first meaningful market correction.
“Ultimately the people who remain invested in the long-term only they make money.”
As markets transition from uncertainty towards relative stability, it is time to focus on fundamentals, stay invested, and use volatility as an opportunity rather than a deterrent.
