Current Market Dynamics Likely Setting The Stage For Next Bull Run, Says Vijay Kedia

Recent market corrections may be paving the way for the next significant bull run, said ace investor Vijay Kedia as he expressed a bullish outlook for the Indian stock market.

In a televised interview with NDTV Profit, Kedia addressed concerns about current market fluctuations, indicating that any worries are likely to be temporary.

When asked about the rationale behind the recent market cuts, Kedia acknowledged discussions around an economic slowdown but emphasised that such cyclical downturns are not indicative of a broader, long-term economic decline. "What we are witnessing is the return of a sensible market," he noted, adding that the prevailing "euphoria" is dissipating, which he sees as a positive development. He believes this cooling off period is essential for preparing for the next bull market, although it may take some time to materialise.

Regarding the upcoming Samvat 2081, Kedia is optimistic of a possible rally, maybe even of 20%, "but before that, the market will likely consolidate further." He pointed out that while individual stocks have seen significant declines—some down by 20-30%—the broader market index has not experienced a substantial fall. This discrepancy suggests to him that a further cooldown is necessary to reset market sentiment.

Kedia also highlighted a structural change in the patterns of bull and bear markets in India, asserting that bull markets tend to be longer and bear markets shorter. "We are neither in a bull nor bear market; we are in a stock market," he remarked, indicating that current conditions are more about adjustment than a definitive trend.

On specific sectors, Kedia expressed caution about the auto industry’s performance in the near term and suggested that rural and urban consumption trends remain poorly understood. He also conveyed a sense of optimism about the capital markets, viewing them as part of a "sunrise sector" with potential benefits over the next 15 years.

Kedia believes that opportunities arise from bear markets, saying, wealth is created when one invests in a bear market. He welcomed the recent market declines, expressing a desire for further corrections to create more attractive investment opportunities.