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The beginning of the fall I < 24k move to more aggressive funds

Weekly Insights and Impact

Author

Vivek B
August 03, 2025

India's oil imports

• A good and meaningful crack in global markets after a fair while, US markets especially had a very bad day on Friday due to bad employment data (73k jobs added against 10,000 expected) and, of course, uncertainties on tariffs.

• The US markets have been long awaiting negative triggers, and this could be one that opens up the floodgates for a much-needed correction.

• The Indian markets, especially the mid and small caps (long long due), cracked some critical levels and unless we get some positive triggers, the markets could end up falling below 24k levels, the saving grace being that large caps are falling much less.

• The Indian currency also slumped post the 25% tariffs announced by the US.

• Our view is that in the very short term markets could remain under stress due to these tariff wars and also over valuation and froth in small and mid caps (If one looks at the broader picture, several stocks with frothy valuations and not so great earnings have already crashed including the likes of Tejas Networks, Titagarh, Honasa and many more (Look out for our report on the market texture in the coming week).

• Our call to play different funds in different market timings have played out very well and we continue to stick to that (Until 24k Nifty levels - stick to ICICI or defensive balanced funds, large cap funds with high cash and STP's, between 23k - 24k - get into aggressive balanced funds like HDFC, start biting more from your liquids into equities and finally if it falls to 23k you can take large sized bites, aggressive equity funds which are equally exposed to all market segments like mid and small caps as well. We quite like the HDFC Multi Cap 50:25:25 Fund and some Nifty 500 equal-weighted funds (but only as an STP or below 24k).