‘Not Time To Panic. It’s Time To Buy’

‘It won’t be a V-shaped recovery. It’ll be consolidation.’
‘Investors might exit during that grind. It’ll be painful.’

As global markets reel from President Trump’s renewed tariffs, sharp sell-offs and wild volatility have, once again, put investors on edge. But Ambareesh Baliga, independent market analyst and one of India’s most trusted voices, sees reason for calm — and opportunity.

In this interview with Prasanna D Zore/Rediff, Baliga decodes the current market panic, separating sentiment from fundamentals and identifying how India’s relative resilience might offer a tactical edge.

Baliga firmly believes the correction is more about perception than economic situation. He points to supportive macro trends: falling oil prices, positive trade differentials, a dovish RBI, and rising consumer liquidity — all of which favour India. But his message is clear: Investors must play smart, not scared.

With decades of experience navigating market cycles, Baliga walks us through which sectors may take a hit — gems, jewellery, auto ancillaries — and which may thrive under rising protectionism, such as local manufacturing plays. He also reassures long-term investors that this might just be a sideways grind, not the start of a deeper bear phase.

His advice: Be disciplined, buy strong businesses hit by sentiment, and brace for a market that tests patience more than portfolios.

President Trump’s renewed tariff imposition has sparked a sharp global sell-off. How do you interpret the intensity of the correction in Indian equities?

I think this was more sentiment-driven than fundamentally driven. Yes, it is going to affect India, no doubt. But from a stock market perspective, everything is relative. And relatively, we are less affected compared to our peers.

On Monday, we saw a sharp buying towards the end of the session after a gap down early in the day and then again on Tuesday the markets jumped 1.7%. What does that tell you?

There is liquidity in the system. It’s not like liquidity is absent. It’s just waiting for the right valuations. Towards the end (on Monday and on Tuesday), people — smart investors — started buying. Even throughout the day (on Monday when the markets gave away sharply), there was a decent amount of buying.

The market opened with a 900-point down, so no one could have sold earlier to buy back later. That shows selling was absorbed on Monday itself — very positive. On Tuesday there was indeed some follow up buying but smart and long-term investors should not look at markets on a day-to-day basis.

With the US markets crashing, are we entering a full-blown global risk-off cycle, or is the worst priced in?

For Indian markets, the worst seems priced in. We are at an advantage on tariffs. Commodities, including oil, are down — that’s a huge plus. A US trade delegation was here last week; a trade agreement is possible.

In April, salaries rise due to tax concessions (in the Union Budget for 2025-26 Finance Minister Nirmala Sitharaman has announced that those having incomes up to Rs 12 lakh will be paying nil taxes), central DA increase, and potentially the Eighth Pay Commission liquidity could kick in and help boost demand.

Expectations are tapered, so even flat quarterly earnings can surprise positively (India’s largest software exporter TCS and Infosys are likely to come up with their quarterly earnings beginning April 10 and then Infosys on April 17).

Can India decouple from global pain in the medium term, or is that wishful thinking?

Decoupling in trade — no. It’s only the US for now (which has increased and is threatening to impose more tariffs on its major trade partners); trade with other countries is normal.

From a tariff perspective, we are at an advantage, but we still need to see how it plays out.

Which sectors in India are most exposed to the downside from this trade war?

Gems and jewellery get hit directly. But most players are private or retail-focused — so not a market issue. Textiles might benefit due to political instability in Bangladesh and higher tariffs on Bangladesh compared to India. Auto-ancillaries too (could be impacted), but large (Indian manufacturers of auto ancillaries) players hedge by having plants in the US.

And sectors that could thrive under rising protectionism?

Manufacture local, sell local — that theme plays out well. Think of Varun Beverages — US brand, made and sold in India. Same for their African units. It’s a model that works.

What about IT and pharma — are they still defensives, or vulnerable now?

After Monday’s fall, they’re worth buying. The fall wasn’t due to Trump’s, but because people expect a slowdown in US discretionary spending. The fall was not directly related to Trump’s position but a sentimental play.

I’m not too worried about pharma because although Trump mentioned it would be taken up, the public backlash and its impact on healthcare costs might deter him from taking drastic measures. So, pharma and IT would still be safer bets once the panic settles down.

In interviews after interviews, you’ve always cautioned that new investors struggle in corrections. What are you seeing today — panic or discipline?

Panic selling was there. That’s why I told my clients: This is not the time to panic — it’s time to buy. You hold quality stocks you believe in, and use this opportunity to buy more, especially if they’ve fallen due to sentiment, not fundamentals.

How long will this meltdown last? Are we in a short-term correction or a deeper bear phase?

I don’t think this impacts India much more. We’ve already seen a fall since October. But the next 6 months could be sideways — slightly down or up. No major moves. It’ll test investors’ patience.

How long before we start bottoming out?

While nobody can say for sure we could be very well close to a bottom, but it won’t be a V-shaped recovery. It’ll be consolidation. Investors might exit during that grind. It’ll be painful, yes.

What are your levels for the market? How much more pain can we expect?

21,800 is a decent support. If that breaks, we could fall 1,000 points more. But unless there’s major new negative news, I don’t see a deeper fall from there.

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