Investment expert Pankaj Murarka from Renaissance Investment Managers believes the current market volatility ahead of the upcoming budget presents attractive entry points for long-term investors, particularly in banking and consumer sectors. Speaking to ET Now, the Chief Investment Officer shared insights on navigating market conditions characterized by persistent foreign institutional investor (FII) selling and global geopolitical uncertainties.

Market Fundamentals Remain Strong Despite Volatility

Murarka describes recent market movements as creating "a perfect capitulation in mid and smallcap" segments, offering opportunities for patient investors to acquire quality companies at more attractive valuations. Despite near-term nervousness from continuous FII selling and the approaching budget announcement, he emphasized India's fundamental economic resilience as a 7% growth economy with improving earnings prospects.

"After last year's slow earnings growth, we are getting back to a stage where we think the index will deliver approximately 12% earnings growth going into the next year," Murarka noted, adding that valuations have normalized following a 12-month period of market underperformance.

Investment Strategy: Long-term Accumulation Over Short-term Trading

Murarka advised a clear distinction between trading and investing approaches in the current environment. For traders, he recommended caution and staying on the sidelines until clearer market trends emerge. However, for investors with longer time horizons, he suggested using market drawdowns as accumulation opportunities.

"Any sign of these kind of panics or drawdowns that they see in the market, they should go and buy into good companies," Murarka stated, emphasizing the importance of focusing on quality companies during market weakness.

Banking and Consumer Sectors Show Strong Promise

The investment chief highlighted two key sectors offering significant value in the current market environment:

Banking Sector Positioned for Growth

Murarka expressed confidence in banks, citing strong balance sheet quality and early indicators of credit growth recovery. Recent earnings reports from sector leaders have been encouraging, positioning banks favorably for the year ahead. The sector benefits from improved asset quality and emerging signs of credit demand recovery.

Consumer Sector Offers Attractive Valuations

The consumer sector presents compelling opportunities after experiencing two years of underperformance, leading to normalized valuations. Murarka remains optimistic about consumer stocks, pointing to significant government stimulus infused into the economy last year. He anticipates increased rural spending in the forthcoming budget, which could provide additional economic support.

Budget Impact and Strategic Positioning

With the budget approximately ten days away, market participants are exhibiting caution. However, Murarka's analysis suggests that pre-budget uncertainty, combined with normalized valuations and improving earnings growth prospects, creates a favorable risk-reward scenario for disciplined investors.

The combination of structural economic strength, anticipated government spending on rural development, and sector-specific improvements in banking and consumption categories forms the basis of Murarka's constructive medium to long-term outlook on Indian equities. This strategic positioning emphasizes the importance of maintaining focus on fundamental strengths while capitalizing on temporary market dislocations.

Indian equity markets are experiencing significant pressure, but the underlying reasons have more to do with global dynamics than domestic weaknesses, according to Deven Choksey, Managing Director of DRChoksey Finserv. Speaking on January 21, 2026, Choksey provided insights into the current market environment and sectoral challenges facing investors.

Global Forces Drive Market Correction

Choksey attributes the recent market correction primarily to global portfolio rebalancing activities. Investors are reducing their exposure to dollar-linked assets, which has created widespread selling pressure across emerging market equities, including India. This global shift has resulted in what Choksey describes as a disconnect between stock prices and actual business fundamentals.

Despite the technical weakness visible in market charts, Choksey emphasizes that underlying business conditions in India remain "extraordinarily robust." Corporate earnings continue to demonstrate strength, and operating performance across various sectors maintains healthy momentum.

IT Sector Faces Valuation Challenges

The mid-tier IT sector, including companies like Persistent Systems, is currently experiencing pressure due to elevated valuations rather than fundamental business issues. Choksey's analysis reveals no concerns regarding business fundamentals or earnings performance in this segment.

The IT sector correction appears to be primarily valuation-driven and could persist as the significant re-rating experienced over the past two to three years requires absorption through time correction and price adjustments.

Consumer and Alcohol Stocks Under Pressure

Consumer and alcohol stocks, including United Spirits, face particular vulnerability in the current environment. Choksey notes that even minor earnings disappointments can trigger sharp de-rating when stocks are priced for perfection. Policy uncertainties related to taxes, duties, or regulatory changes can lead to sustained pressure on these highly valued stocks.

Investment Strategy Recommendations

In this challenging environment, Choksey stresses the importance of patience and maintaining investments in quality companies rather than reacting to short-term market volatility. He characterizes the current situation as "collateral damage" caused by currency-related volatility and global uncertainty, rather than fundamental deterioration in Indian business conditions.

The market expert advises investors to focus on the strong corporate earnings and healthy operating performance across sectors, while acknowledging that the valuation-driven correction may require time to resolve through natural market mechanisms.