Market Corrections in March May Seem Small, But Many Stocks Impacted

New Delhi, March 26 (IANS) While the headline correction in the markets in March appears moderate, Emkay Institutional Equities reported that a substantial number of stocks have been significantly affected, particularly in the energy, real estate, and materials sectors.

The correction observed in March can be attributed to inflated valuations and concerns regarding liquidity within small and mid-cap funds and stocks. Emkay maintains its stance of Nifty to remain at 24,000 level, expecting the market to rebound in 3-6 months.

According to the analyst, there are multiple triggers for the bounce back in 1-2 quarters, including the anticipated victory of the NDA in the forthcoming Parliamentary elections, enactment of the initial reform-focused budget by the new government, and monetary stimulus from both the Federal Reserve and the Reserve Bank of India.

The current rally in Small and Mid Caps (SMIDs) is primarily driven by a shift in India’s economic growth trajectory from consumption and services towards manufacturing and investment. This shift has resulted in a redistribution of the profit pool away from sectors dominant in the large-cap universe towards manufacturing sectors, propelling the market’s rally.