Ongoing Bull Market Despite Recent Corrections
Veteran investor Ramesh Damani believes that Indian stock markets are firmly in the middle of a long-term bull run, despite recent corrections. According to him, the ongoing selloff is a temporary phase and not an indication of a market peak.
During an interaction with CNBC-TV18 on March 24, Damani emphasized that investors should not be alarmed by Foreign Portfolio Investors (FPI) selling, as it is a routine occurrence during any market cycle. He noted that even amid market volatility, several stocks continue to hit fresh highs, demonstrating strong underlying growth trends and ambitious corporate capital expenditure (capex) plans.
“Do not pay attention to the FPI selling; what we have seen is a correction in an ongoing bull run.” – Ramesh Damani
Global Market Volatility and Economic Shifts
The recent correction in Indian equities has coincided with increasing global economic uncertainty, particularly political shifts in the United States. Damani pointed out that these factors are contributing to temporary turbulence in financial markets, but they are unlikely to reverse the broader trend of globalization.
He warned that the US market could face a dark phase due to political and economic uncertainty. However, he remained optimistic about long-term global market trends, emphasizing that periods of uncertainty have always been followed by sustained growth cycles.
America’s Inward Shift and Its Global Consequences
Damani commented on the evolving geopolitical landscape, particularly the 2024 US elections and their impact on global markets. He noted that the political narrative in America, especially under Donald Trump, is shifting towards economic nationalism.
“The world is not going left or right, but America is turning inward for the first time. That has profound changes on the world.” – Ramesh Damani
Despite these changes, he believes that globalization remains inevitable. He highlighted that while the US may attempt to reconfigure its economic policies, the long-term arc of global trade, technological advancement, and financial markets will continue to progress.
Stock Market Correction: A Temporary Phenomenon, Not a Reversal
Addressing concerns about market downturns, Damani remains firmly bullish on India’s equity markets. He pointed out that the Indian bull run, which started in 2021, remains intact and that corrections like the current one are natural and short-lived.
“This correction is not a sign of the market topping out. Rather, it’s just a healthy pause in a long-term bull market.” – Ramesh Damani
He noted that historically, major bull markets have witnessed sharp corrections but they tend to be brief and often create opportunities for long-term investors. Even as benchmark indices have corrected, several individual stocks have continued to achieve new highs, a phenomenon that is not typical of a bear market.
Foreign Investor Selling Does Not Signal Market Weakness
A major concern among investors has been the recent selloff by Foreign Institutional Investors (FIIs). However, Damani dismissed fears surrounding FPI outflows, highlighting that every sale in the market has a corresponding buyer.
“Anytime there is a transaction in the stock exchange, there is a buyer and a seller. So, when there’s selling by FPIs, there is also someone buying.” – Ramesh Damani
He noted that domestic investors and institutions have been stepping in to absorb these outflows, reflecting strong confidence in the Indian economy and corporate earnings potential.
No Excessive Leverage, No Systemic Risk
One of Damani’s key observations is that India’s financial markets remain fundamentally strong. Unlike previous market crashes that were fueled by excessive leverage, the current correction is orderly and not indicative of any deep-rooted financial instability.
“There is no such thing as easy money on Dalal Street. Corrections shake out the excesses, but they also create fresh buying opportunities.” – Ramesh Damani
He pointed out that the Indian government has maintained fiscal discipline, preventing any artificial inflation of asset prices through excess liquidity. The absence of high levels of leverage in the system further reduces risks associated with prolonged downturns.
