Trump Warns Iran of 'Greater Force' as Israel Shuts Airspace; Indian Stocks Brace for Monday Slump

  The escalating Israel-Iran conflict, now intensified by U.S. strikes on Iranian nuclear sites, has sent shockwaves through global markets. U.S. President Donald Trump, speaking from the White House, warned Iran of “greater force” if it retaliates, labeling the nation a “Middle East bully” and urging peace. With Israeli airspace closed and U.S. B-2 stealth bombers deployed to Guam, the situation is precarious. This article analyzes the potential negative impact on the Indian stock market come Monday, as geopolitical tensions threaten economic stability. Escalation of the Israel-Iran Conflict The conflict entered its second week with the U.S. confirming strikes on Iran’s Fordow, Natanz, and Isfahan nuclear facilities. These targeted attacks follow heightened hostilities between Israel and Iran, with Trump’s remarks signaling a hardline U.S. stance. The closure of Israeli airspace underscores the severity of the situation, disrupting regional trade and aviation routes. Iran’s potent...
0

Should You Buy the Dip or Wait for the Floor? Nifty 50 Set for 11% Gains in FY26

 


The Indian stock market has been a rollercoaster ride in FY25, with the Nifty 50 index scaling an all-time high of 26,277 in September 2024 before plummeting into a five-month decline the longest in its history since 1996. However, as of March 31, 2025, the market has staged a notable recovery, closing the fiscal year with a respectable 5.34% gain. Analysts now project an 11% upside for the Nifty 50 in FY26, targeting a range of 26,000–26,500, driven by improved economic conditions, attractive valuations, and the return of foreign institutional investor (FII) flows. But the big question for investors is: Should you buy the dip now or wait for the floor? Let’s break it down.

Nifty 50 in FY25: A Tale of Two Halves

The financial year 2025 was marked by stark contrasts. The first half saw a roaring bull run, with the Nifty 50 hitting its peak of 26,277 in September 2024. However, the tide turned swiftly as a combination of factors—slowing India Inc earnings, fears of Donald Trump’s tariff policies, and lofty valuations triggered a massive sell-off. The index endured a five-month losing streak, shedding 10.5% from its record high.

Yet, March 2025 brought a much-needed rebound. Value buying kicked in as beaten-down stocks became attractive, and foreign portfolio investors (FPIs) returned with a vengeance, injecting $2.65 billion into Indian equities in the last five trading sessions of FY25. Despite this late surge, total FPI outflows for the year stood at $15.57 billion the second-highest ever owing to a shift in focus toward China amid its stimulus measures and AI-driven growth.

Why Analysts Are Bullish on FY26

Analysts are optimistic about the Nifty 50’s trajectory in FY26, projecting a target of 26,000–26,500 an 11% jump from current levels. Several factors underpin this bullish outlook:

  1. Appealing Valuations: The 30–40% correction in small-cap and mid-cap stocks has eased earlier concerns about overvaluation, making these segments ripe for bottom fishing.
  2. Easing Inflation: With inflationary pressures subsiding, the Reserve Bank of India (RBI) may adopt a more accommodative stance, boosting economic growth and market sentiment.
  3. Return of FII Flows: After months of outflows, FPIs are showing renewed interest in Indian equities, bolstered by improving macroeconomic conditions.
  4. Earnings Recovery: Experts like Chokkalingam G, Founder of Equinomics Research, believe the worst is over for India Inc, with a robust earnings turnaround expected in Q1 FY26.

Chokkalingam notes, “The first quarter of FY26 will be very strong, driven by attractive valuations, especially in small and mid-cap stocks.” This optimism suggests the market may have already weathered its toughest phase.

Nifty 50 at 26,500: A Realistic Target?

Despite trading 10.5% below its September 2024 peak, the Nifty 50 is showing signs of resilience. The recent rally in March 2025, fueled by value buying and FII inflows, has sparked hope among investors. Analysts argue that the combination of undervalued stocks, improving corporate earnings, and a favorable global economic environment could propel the index to 26,500 by the end of FY26.

However, risks linger. Global uncertainties, such as Trump’s tariff policies and shifting FPI preferences toward China, could derail the rally. Investors must balance these risks with the potential upside.

Buy the Dip or Wait for the Floor?

So, should you buy the dip now or hold out for a deeper correction? Here’s a breakdown to guide your decision:

Case for Waiting for the Floor

  • Lingering Volatility: Global uncertainties, including U.S. policy shifts and China’s economic resurgence, could push the Nifty lower.
  • Bigger Bargains Ahead: If earnings falter or FII outflows resume, stocks could drop further, offering cheaper entry points.
  • Technical Support: The Nifty may test critical support levels (e.g., 23,500–24,000) before a sustained recovery, rewarding those who wait.

Case for Buying the Dip Now

  • Valuations Are Compelling: The 30–40% crash in small and mid-cap stocks has already created attractive opportunities in fundamentally strong companies.
  • Momentum Is Gaining: The March 2025 rally and FII inflows suggest a trend reversal, hinting that the worst may be behind us.
  • Long-Term Upside: Starting to accumulate now, especially via SIPs or at support levels, could position you for significant gains by FY26 if the Nifty hits 26,500.

The Winning Play: Buy Quality Stocks on Dips

Timing the absolute floor is a gamble few can win consistently. Instead, focus on buying quality stocks during dips at key support levels. Target companies with:

  • Robust fundamentals (steady revenue growth, low debt).
  • Reasonable valuations (P/E or price-to-book below historical norms).
  • Sector resilience (e.g., IT, pharma, or FMCG tend to hold up during turbulence).

Use technical indicators like the 200-day moving average or Fibonacci retracement levels to pinpoint strong entry points. This strategy balances risk and reward without the stress of chasing an elusive bottom.

Final Take: Don’t Miss the Boat

With analysts forecasting an 11% gain for the Nifty 50 in FY26, the Indian stock market is poised for a recovery. Waiting for the floor might appeal to cautious investors, but the current dip combined with attractive valuations, FII inflows, and an expected earnings rebound makes a compelling case for action. As Chokkalingam G asserts, “The worst is over,” and Q1 FY26 could ignite a powerful uptrend.

Start accumulating gradually, diversify your portfolio, and monitor global developments. Whether the Nifty reaches 26,500 or surpasses it, buying the dip in quality stocks now could set you up for a profitable FY26.

Location:Nainital Uttarakhand ,India India

Comments

Post a Comment