The Indian stock market has seen a sharp decline this month, leaving investors worried after a major sell-off in March. What is driving this fall?
Pradeep Haldar, founder and CEO of PHD Capitals (SEBI-registered research analyst), breaks down the key reasons behind the downturn.
International factors
The war between America and Iran has created uncertainty worldwide. Its impact has fallen on the share market. Crude oil prices remain above $110. Since India imports vast amounts of oil, the rise in oil prices is extremely concerning. The US Federal Reserve has kept interest rates unchanged. As a result, it is believed that due to the current inflation, there will be no significant rate cuts until the end of 2026.
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FII is exiting the Indian market
Pradeep Haldar shares that since the start of the West Asian war, FPIs have sold shares worth more than 1 lakh crore rupees from the Indian market. He states that in the first 20 days of March, 1 lakh 3967 crore rupees exited the Indian market.
Domestic factors
The rupee has hit a record low compared to the US dollar. When the rupee weakens, import costs increase significantly. Rising fuel prices are bad for the market. Additionally, according to Pradeep Haldar, the resignation of HDFC Bank's chairman has dealt a major blow to India's stock market. The index has declined due to falling share prices of multiple large companies.
What should investors focus on before investing now?
PHD Capitals' Pradeep Haldar has outlined 5 points for retail investors.
1. Crude oil prices: If it stays above $110 per barrel, there will be pressure on the market
2. America-Iran war: If this conflict ends, FII might return
3. Indian currency (INR) value: If INR falls further, more FII will exit
4. HDFC: Need to watch which direction this bank's management is heading
5. Q4 of fiscal year 2026: If corporate profits are good, the market will rise quickly
What should retail investors do?
SEBI-registered research analyst Pradeep Haldar has shared key advice for retail investors amid the ongoing market decline. He cautioned against panic selling, saying, “It would be very wrong to panic and sell everything now.”
According to Haldar, market corrections can actually benefit long-term investors. He noted that when prices fall, investors are able to accumulate more units through Systematic Investment Plans (SIPs). “Such corrections are good for SIP. SIP should definitely be continued now,” he said.
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Is this the right time to invest in ETFs?
Haldar also suggested that exchange-traded funds (ETFs) can be considered, but with a cautious approach. He advised investors to gradually invest in Nifty 50 or Sensex ETFs rather than making lump-sum decisions.
He added that global firms like Goldman Sachs, Morgan Stanley, and HSBC remain optimistic about India’s market growth. Calling the current downturn temporary, Haldar recommended that investors stay invested and continue cautiously without fear.
