Expect limited upside in near term, stick to stock-specific strategy: CA Rudramurthy BV

Despite a promising start, Indian markets have been unable to hold onto recent gains, leaving investors uncertain about the near-term outlook. The broader sentiment has turned cautious even though the fundamental backdrop appears strong. Reflecting on the recent trends, CA Rudramurthy BV, MD, Vachana Investments in an interview to ET Now pointed out that several positive triggers have failed to lift the market.

“See, if you see the market fundamentally, even though we had great earnings quarter, business updates were very good, and even if you see Bihar election, results were way above expectation, so many positive news. GDP was never expected to be 8.2%, the best estimate was 7.5% and we got such a great GDP number. So, in spite, of all these positive fundamental developments, markets are not going anywhere.” He added that while the economy is delivering strong numbers, global headwinds continue to weigh on sentiment.

Outlining the risks, he highlighted the drag from a weakening rupee and persistent foreign selling. “In fact, negative side if you see on the market, yes, rupee has clearly crossed above 90 per dollar and we have seen that rupee depreciation FIIs have been continuously selling this market and the Trump tariff deal is yet to come and we do not know when it will come. All are watching for a Trump tweet and even if that comes, I do not know market may not take it much surprise now because all positive news is not taking this market up.” According to him, the lack of market response to positive developments, including political stability and strong earnings, shows that traders need to stay alert.

Rudramurthy stressed that this is not a market for high leverage or aggressive buying.

“So, I am saying just based on screen and technical levels, this is not a market to have high leverage, buy all along, and I want people to be very cautious in this market especially if you are a short-term trader, cut your leverage, be in specific sectors, have low beta stocks in your portfolio, hedge it very well if you are a short-term trader.”

He noted that midcap and smallcap segments, in particular, continue to show visible weakness, making stock selection even more crucial. Even with supportive domestic cues, including Bank Nifty’s earlier outperformance and the RBI’s rate cut, the market has struggled to build upward momentum. He added that the upcoming Federal Reserve meeting may also fail to spark a major reaction. “Now, the only thing left out is the Fed meet which happens and then even if there is a rate cut, I would not be surprised if this market does not react positive for all that.”He flagged two key support levels for traders: Nifty at 25,700 and Bank Nifty at 58,500. A breach of these levels, he cautioned, could worsen the short-term outlook. “If you break 25,700, everything is gone in this market for short term,” he said, urging traders to remain extremely selective. However, he also pointed out that long-term investors can still find opportunities in the ongoing consolidation. “However, if you are a medium to longer term from investor, yes, you have lot of picks to make in these kinds of sluggish market.”Among sectors, he sees notable strength in metals, especially aluminium and copper, while silver also looks promising. Vedanta remains one of his top conviction calls. “Vedanta for me at current market price is a mouthwatering buy. Even on technical chart, yes, there is a strong base formation at 500, 505. So, I will be a buyer at current market price and every dip is a buying opportunity in Vedanta. Look at initial targets of 550 and then 580 to come. Keep a stop loss of 510.” He extended this optimism to Motherson, which has shown both solid results and a bullish chart structure.

“Last quarter results were fabulous and stock is now making a clear rising top, rising bottom formation on technical which is very positive. So, I am looking at initial targets of 135 on Motherson and then 150. With a timeframe of one year, one can definitely look at buying Motherson for 150 target, keep a stop loss of 110.”

With a mix of global uncertainty, domestic resilience, and sector-specific opportunities, Rudramurthy’s message is clear: short-term traders must stay cautious and hedged, while long-term investors can selectively accumulate quality names like Vedanta and Motherson in the current market environment.