Nifty 50 Recovery: Is a Major Comeback on the Horizon?

The Nifty 50 index has gone up more than 2% over the last few days and seems to be bouncing back. Looking back at history, these moments often lead to strong recoveries. Over the past 20 years, the Nifty 50 index dropped more than 10% 13 times. In 11 of those cases, the index ended up giving positive returns within a year, with an average gain of 21%. If investors held on to their investments for three years after a drop, none of those instances showed negative returns, according to data from Baroda BNP Paribas AMC.

As investors pay close attention, an important question arises: Is this the start of another big recovery, or just a short-term rise amidst ongoing market worries? The past strength of the market reminds us of Warren Buffett’s famous saying: “Be greedy when others are fearful, and be fearful when others are greedy.” Right now, many investors are nervous because of the recent drops.

Suresh Soni, the CEO of Baroda BNP Paribas AMC, shares an essential thought: “Panic selling only locks in losses, while staying invested lets time and compounding create growth.” It’s important to remember that we don’t lose money because the market drops; we lose money when we panic.

Market Sentiment: Are We at Peak Fear?

Historically, markets start to recover when fear is extremely high, and that’s what we’re seeing today, according to investment platform Fisdom. They suggest that while there will be ups and downs in the near future, investing in high-quality companies and sectors benefiting from new projects (capex) is crucial. They expect earnings, which fell in the third quarter of the fiscal year, to rise significantly from the second quarter onward, driven by economic improvements and company investments.

This viewpoint is backed by Motilal Oswal, stating that various signs indicate that the Indian stock market might be nearing the end of its correction, unless an unexpected risk pops up. They expect to see a shift from slow growth to double-digit earnings growth by the fiscal year 2026. Large-cap stocks are now about 10% cheaper than usual, and India’s financial policies are becoming more supportive, which should improve demand and market mood.

Foreign Investors Cautious, But Recovery is Possible

Foreign institutional investors (FIIs) are being careful, but domestic investors continue to bring stability. Fisdom explains that as sectors improve, clear policies form, and global uncertainties ease, FII investments should stabilize. Moreover, government spending and better earnings visibility strengthen India’s long-term growth predictions.

Morgan Stanley is confident about India’s future, setting a target of 93,000 for the Sensex by December 2025, with an optimistic scenario reaching 105,000. They note that their sentiment indicator has fallen into a strong buying range, similar to what was seen during market recoveries in the past.

Is the Market Oversold?

Mohit Nigam, head of PMS at Hem Securities, thinks the market overreacted. “There has been too much selling in Indian markets, almost like there’s no tomorrow! It’s surprising to see Indian markets reacting strongly to every bit of bad news worldwide, which may not have a big impact on our economy. This overselling suggests we might be close to a real rebound.”

Dipan Mehta from Elixir Equities offers a balanced view: if no more bad news comes, then we might have hit a bottom. But we live in uncertain times, and any unexpected global issue could affect how people feel about the market. That said, Mehta points out that many worries about slowing growth are already considered in current prices. He advises increasing investment in promising Indian companies and businesses focused on domestic growth.

With historical patterns pointing towards a rebound and expert opinions suggesting signs of stabilization, the big question remains: Will this time really be different, or is another major comeback on the horizon?

(Disclaimer: The opinions and insights from experts in this article are their own and do not reflect the views of Thellv.news)