Capitalmind AMC’s Anoop Vijaykumar, Head of Equities, warned that a 10% sell‑off is likely in the next quarter as macro pressures mount.
The backdrop is a combination of higher US Treasury yields, repeated Federal Reserve rate hikes, and the Reserve Bank of India’s expected tightening cycle. These forces are already dampening sentiment across the market, according to Vijaykumar.
Consumer‑discretionary and industrial‑manufacturing stocks are set to see the most pronounced pullback. Mid‑cap IT firms that have invested in AI are marginally insulated, but they too are feeling the squeeze. Pharmaceutical equities, buoyed by dollar‑denominated earnings, remain over‑valued and may see a corrective run. Auto sales data from early quarters are tepid, and monsoon weaknesses could further cool rural demand.
The market reacted with the Nifty 50 sliding 0.5%, while sector indices such as Consumer Discretionary and Industrial Manufacturing fell close to 1%. Analysts expect RBI to lift rates by 25 basis points in the next policy meeting, and the Fed’s next hike is likely within the next month, tightening the risk‑on environment even further. Investors are advised to monitor the next earnings season closely for any reversal signals.