Time to buy, sell, or hold stocks amid market sell-off? Analyst view here

IT, pharma, cement, and other sectors look attractive to analysts with no pre-budget rally in picture

It has been a slow grind down for the markets thus far in calendar year 2025 (CY25) with the Sensex and the Nifty50 indices tumbling 2.95 per cent and 2.74 per cent, respectively till date.

 

While most analysts do not wish to hazard a guess if the worst is over for the markets, the current fall, they suggest, presents a good opportunity for long-term investors to start nibbling stocks of companies that have done operationally and financially well in the recently concluded quarter.

 

However, they do caution against the volatility in the weeks ahead and rule out any pre-budget rally in the backdrop of domestic and global events, which are likely to keep the markets choppy in the near-term.

 

"This six-day week is likely to be highly volatile with other major events like the Fed decision and the Budget in India. The market is looking forward to fiscal stimulus through income tax cuts in the Budget. If the expectations are met, there can be a relief rally in the market. But if a rally is to sustain, we need data indicating growth and earnings revival," said V K Vijayakumar, chief investment strategist at Geojit Financial Services.

 

At the bourses, meanwhile, the fall in the mid-and small-caps has been sharper thus far in CY25 as compared to the frontline Nifty50, with both the indices slipping 7.29 per cent and 10.57 per cent, respectively during this period. 

 

"One should be investing for longer-term as market rally post-budget does not last beyond two to three days," said Ambareesh Baliga, independent analyst, who recommends buying in a staggered manner to average out at lower levels.

 

On a similar note, G Chokkalingam, Founder & Head of Research, Equinomics Research said, "More than budget, the valuations seems contracted badly. Thus, this is a perfect opportunity to invest in a phased manner till the Budget."

 

Information technology (IT), pharmaceuticals, specialty chemicals, cement, banks and fast-moving consumer goods (FMCG) are among the sectors preferred by analysts.

 

Year-to-date (YTD), the Nifty Pharma index has declined over 7 per cent, Nifty FMCG has declined over 1 per cent, Nifty IT has lost nearly 0.5 per cent, and Nifty Bank has declined over 5 per cent.

 

Chokkalingam recommends investing in the pharma sector, as he sees companies growing financially and other positive triggers.

 

"Some pharma companies are still growing in double digits and they are poised to benefit from rupee depreciation. Moreover, the US President Donald Trump's government cannot impose severe restrictions on the import of pharmaceutical products as that will directly affect the health and wealth of US consumers," said G Chokkalingam.

 

Chokkalingam is also upbeat on the banking space as he sees banks' business still growing in double digits.

 

Apart from this, he suggested focusing on mid and small-cap segments as he sees a lot of growth opportunities, value unlocking, and acquisition.

 

Baliga, on the other hand, prefers specialty chemicals as he reckons the sector will benefit from the China+1 strategy with Trump assuming charge as the 47th US President earlier in January. FMCG and cement-related stocks are his other 'buy' recommendations.