The stock market has been on a rollercoaster ride, with continuous Foreign Institutional Investor (FII) sell-offs causing market instability. Investors are worried as market indices show persistent declines. However, amid the concerns, Finance Minister Nirmala Sitharaman has issued a reassuring statement about the situation, emphasizing that there is no need to panic.
At the same time, market guru Sanjiv Bhasin has made a strong prediction about a market surge in the coming months. Let’s dive into the details of these statements and analyze the current market scenario.
FII Sell-Offs and the Finance Minister’s Perspective
The Indian stock market is witnessing a significant wave of FII sell-offs. In February alone, foreign investors offloaded shares worth approximately ₹91,343 crore. This heavy selling pressure has led to uncertainty among retail investors.
Finance Minister Nirmala Sitharaman, while addressing industry stakeholders after presenting the Union Budget 2025-26, stated that this sell-off is primarily profit booking and not a sign of fundamental weakness in the market. She assured that global uncertainties often lead to such movements and emphasized that India’s economic outlook remains strong.
To boost long-term investments, the government has increased capital expenditure by 10.2%, allocating ₹16 lakh crore for infrastructure and asset-building initiatives. Additionally, Sitharaman highlighted efforts to reduce debt-to-GDP ratio and optimize government borrowing.
Sanjiv Bhasin’s Bold Prediction: Market to Hit New Highs
Amid the market downturn, Sanjiv Bhasin remains optimistic. According to him, the current market weakness is temporary, and a massive rally is on the horizon. He predicts that by June-July 2025, the stock market will surge to new record highs.
Bhasin took to social media platform X (formerly Twitter) and stated, “The night is darkest before dawn. A strong rally is coming, and by mid-year, the market will touch new highs.” He urged investors to remain patient and increase their equity holdings during this phase.
Reasons Behind Bhasin’s Optimism:
- Profit Booking by FIIs: The recent FII sell-offs are primarily short-term profit bookings, not an indication of economic distress.
- Domestic Investment Growth: The government’s push for 100% FDI in insurance and increased lending support for MSMEs will stimulate economic growth.
- Global Market Trends: Historical trends show that Indian markets rebound strongly after short-term corrections.
New SIP Accounts Open, But Many Investors Exit
One of the most surprising market trends is the rise in SIP (Systematic Investment Plan) accounts, despite growing concerns among investors. In December alone:
- 5.4 million new SIP accounts were opened
- 4.4 million SIP accounts were closed
This indicates that while new investors are entering the market, many are also exiting due to market volatility and uncertainty.
Why Are Investors Exiting?
- Short-Term Market Declines: Many investors panic when they see falling returns and withdraw funds prematurely.
- Shifting Investment Strategies: Some investors are moving funds between mutual funds rather than sticking to long-term SIP plans.
- Doubt Over Long-Term Growth: While financial advisors recommend staying invested for decades, some investors are skeptical about future returns.
Experts argue that SIPs work best in the long run and investors should avoid making hasty decisions based on short-term market trends.
Current Market Situation: Why Is There Pressure?
1. Weak Corporate Earnings
The Q3 earnings for FY 2024-25 have been disappointing, with many companies showing single-digit growth. Analysts believe that high stock valuations are not justified if earnings growth remains sluggish.
2. Economic Uncertainty
While the U.S. stock market is booming, other global markets, including India, are facing challenges. Experts suggest that focusing only on U.S. market trends may not be the right approach.
3. Changing Investment Behavior
Domestic investors have played a crucial role in stabilizing the market through SIP contributions and direct equity investments. However, the recent decline in SIP renewals suggests a weakening of retail investor confidence.
Should You Invest Now or Wait?
Given the mixed signals in the market, the big question for investors is: Is this the right time to invest, or should they wait?
Key Takeaways for Investors:
- Market volatility is normal: Historically, markets recover and hit new highs after corrections.
- Long-term investors should stay invested: If you are investing for 5-10 years, this correction could be an opportunity to buy at lower levels.
- Diversification is key: Don’t put all your money into a single asset class; diversify across equities, debt, and other financial instruments.
Final Thoughts: What’s Next for the Market?
Despite the current downturn, Sanjiv Bhasin’s bullish prediction brings hope to investors. If his forecast holds true, the market could see significant upside by mid-2025.
However, investors must exercise caution and make informed decisions. Before making any investments, consult a financial advisor or conduct thorough research.
