Fund Managers Confident on Indian Equities Despite Short-Term Market Rout

• Indian equity markets experienced a sharp sell-off on January 20, with Sensex plunging over 1,000 points and Nifty falling below 25,250, erasing Rs 10 lakh crore in market capitalization.
• Key factors contributing to the rout include weak earnings reactions, sustained foreign investor selling, and rising global geopolitical tensions, particularly around tariffs and trade protectionism.
• Fund managers like Chirag Mehta (Quantum AMC) and Alok Agarwal (Alchemy Capital Management) believe much of the pressure is global, with India's markets being relatively resilient due to their inward-looking structure and already priced-in risks.
• Aishvarya Dadheech (Fident Asset Management) highlighted earnings disappointment as a significant factor, noting unexpected sharp declines in stocks like ICICI Bank, HDFC Bank, and Havells despite results being in line with expectations.
• Despite near-term volatility and lack of excitement around the Union Budget, fund managers see selective opportunities, especially in mid- and small-cap stocks that have corrected significantly, and sectors like autos, mid-sized banks, consumption, and IT.

Why It Matters: Despite short-term volatility from global and earnings pressures, fund managers remain confident in Indian equities' medium-term prospects.