NewsStocksMarket correction driven by sentiment, not fundamentals: Bajaj Finserv AMC's Nimesh Chandan remains bullish on IndiaMarket correction driven by sentiment, not fundamentals: Bajaj Finserv AMC's Nimesh Chandan remains bullish on India
Bajaj Finserv AMC CIO Nimesh Chandan views the recent market correction as sentiment-driven rather than fundamental weakness, despite the Nifty's 2.50% weekly decline and ₹15.00 lakh crore wealth erosion. He estimates US trade disruptions affect only 0.30-0.50% of India's GDP and expects sentiment-driven re-rating once uncertainty subsides. The fund remains positive on telecom sector while maintaining cautious stance on IT despite attractive valuations.
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Bajaj Finserv AMC's Chief Investment Officer Nimesh Chandan maintains a bullish outlook on Indian markets despite recent volatility, arguing that the current correction stems from sentiment rather than fundamental weakness. Indian equities snapped a two-week winning streak amid rising geopolitical tensions, with BSE-listed companies seeing investor wealth erode by over ₹15.00 lakh crore during the week.
Market Performance and Sentiment Analysis
The recent market turbulence saw significant declines across indices, reflecting deteriorating investor confidence:
| Index Category: | Weekly Performance |
|---|---|
| Nifty: | -2.50% |
| Broader Indices: | Up to -6.00% |
| Nifty 2025 Performance: | +10.00% |
Speaking to CNBC-TV18, Chandan characterized 2025 as a "very noisy year" for markets, despite respectable headline returns. He noted that while the Nifty remained up around 10.00% in 2025, persistent global uncertainty has weighed heavily on investor confidence. The fund manager emphasized that earnings estimates have largely remained intact, with investors cutting valuation multiples due to uncertainty rather than fundamental deterioration.
Economic Fundamentals Remain Strong
Chandan highlighted several positive factors supporting India's economic outlook compared to the previous market peak in September 2024. He pointed to improving business and profit cycles, a supportive credit environment, lower interest rates, and higher system liquidity as key strengths. According to the CIO, India's underlying economic cycle is in a far better position today, with the missing element being market sentiment.
Trade Relations and Economic Impact
Regarding the India-US trade deal, which appears delayed beyond earlier expectations, Chandan offered a measured perspective on the potential economic impact:
| Trade Impact Metrics: | Estimated Effect |
|---|---|
| GDP Impact: | 0.30-0.50% |
| Corporate Profits Impact: | Less than 2.00% |
The fund manager believes markets are overstating the actual economic impact of trade-related disruptions. He noted that global trade ultimately boosts productivity for participating economies, while tariffs tend to hurt domestic consumers through higher inflation. With inflation already a political concern in the US, Chandan expects prolonged trade disruption to have natural limits.
Sector Outlook and Investment Strategy
Bajaj Finserv AMC maintains a positive stance on the telecom sector, citing several favorable factors:
- Improving industry structure with limited competition
- Tariff hike potential
- Rising average revenue per user
The fund prefers the two large telecom operators and also owns tower businesses, providing sector exposure without balance-sheet risk. Regarding Vodafone Idea, Chandan noted that clarity on AGR relief had been anticipated, with markets potentially expecting more decisive outcomes.
For the IT sector, the fund maintains a cautious approach despite attractive valuations in large-cap stocks. Growth visibility remains weak due to geopolitical uncertainty and seasonal softness. Bajaj Finserv AMC is underweight large-cap IT but selectively invested in mid-cap companies demonstrating consistent growth.
Earnings and Future Outlook
Chandan expects the December quarter to be broadly steady without major negative surprises. He emphasized that management commentary and guidance for FY27 will be critical, particularly for automotive and consumption-focused companies where growth expectations range between 14.00% and 17.00%. The fund manager believes a reduction in global uncertainty, combined with clarity on trade and policy matters, could quickly change the market narrative and potentially trigger a sentiment-driven re-rating.
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