Bandhan AMC’s Senior Vice President Karthik Kumar warned that the market may stay in a consolidation phase for up to a year, flagging current large‑cap valuations as fair for a medium‑to‑long‑term horizon.
The three key drag factors Kumar highlighted are higher crude prices, rising US yields, and a strengthening dollar. He noted that crude has been the biggest mover, sustaining elevated levels, while US yields and the dollar index have co‑moved in tandem, exerting downward pressure on equity markets.
Risk appetite has visibly weakened last week, the first genuine contraction after months of sideways trading. Mid‑ and small‑cap activity, IPO and secondary market participation had previously signaled healthy risk appetite, but the latest week saw a pullback, reflecting market sensitivity to the macro‑triggers.
Looking ahead, Bandhan AMC maintains a cautious stance, seeing capital‑market plays as a secular theme but urging close monitoring of cycle dynamics. The firm remains selective on IPOs and UPI‑linked stocks, preferring thorough analysis before participation, and advises investors to weigh current valuations against the forecasted consolidation period.