Nifty On Gradual Dip: Expert Picks Five Tariff-Proof Stocks To Buy For Long-Term
The Indian stock market snapped a six-week losing streak ahead of India’s Independence Day 2025, buoyed by robust domestic inflows and strong macro indicators despite geopolitical headwinds. India Inc’s latest quarterly earnings growth came in mixed, which has weighed on sentiments.
Current Market Scenario
However, S&P’s recent upgrade of India’s sovereign credit rating to BBB is expected to boost investor sentiment and support growth. On last year’s Independence Day, the NSE benchmark Nifty 50 stood at 24,143.75, nearly 490 points away lower than today’s 24,631.30. In the last one year, several triggers have contributed towards the upward momentum of the index.
However, amid the ongoing US-India trade deal negotiations, the stock market sentiment has turned sour over the cautious approach adopted by investors. Traders are on edge due to the dynamic geopolitical events.
Expert Insights
In the current market scenario, V.L.A Ambala, a SEBI-registered Research Analyst, said in an interview with NDTV Profit’s Nikita Prasad that Nifty 50 is showing a weak momentum and may experience a gradual downside in the near-term. The D-Street expert believes investors should bet on domestic cyclicals and monopoly players for the next one year.
Impact of US Tariffs on Indian Stock Market
The US trade tariffs can dampen broader investor sentiment if they are targeted toward sectors where India is engaged in exports. Such a move would act as a blow to the earnings of affected companies and tip the scales of global trade flows. Notably, India’s direct export exposure to the US is not as high as that of some Asian peers.
We must understand that market sentiment is mostly driven by global risk-off moves. Currently, the Nifty is showing a YTD gain of 4.10% and a 2.5% gain on a YoY basis. However, on the technical chart, momentum seems weak as the index formed a dark cloud cover bearish candlestick pattern.
Key Factors that Moved Indian Markets
If we analyze the trends and market sentiment over the last one year, several factors emerge as key drivers. However, global cues such as the US Fed’s interest rate stance, US inflation trends, and crude oil price spikes that have caused intermittent volatility and global market impact could be considered among the top triggers.
The earnings season was another significant trigger. Mixed corporate results and mounting pressure on IT and export-oriented sectors raised concerns, while domestic manufacturing and auto sectors demonstrated resilience. Meanwhile, FII and domestic inflows remained a major talking point throughout the year.
India Inc. Earnings Growth
Weaker global demand and pricing pressure in IT and pharma exports have definitely dented India Inc’s earnings growth. Based on the prevailing sentiment, Q2 FY25 and Q3 FY25 will likely report some fluctuations.
For FY26, Nifty companies’ EPS growth is now projected around 9% to 10%, which is below previous expectations of 14% to 15%. In fact, headwinds such as tariffs and commodity volatility could cap export earnings and weigh on the upcoming financial year’s growth prospects.
Defensive Stocks and Domestic Cyclicals
Yes, defensive stocks such as FMCG, utilities, and healthcare, along with domestic cyclicals like infrastructure, capital goods, and cement, are well-positioned in the current environment. Investing in defensive stocks can offer stable earnings if global risks escalate over time. Similarly, domestic cyclicals are more likely to benefit from increasing government spending, upbeat real estate momentum, and the urban capex cycle.
My analysis suggests that defense manufacturing, including both PSUs and private suppliers along with the power sector, especially renewable-linked companies, railways and logistics under infrastructure expansion, and select midcap manufacturing exporters in chemicals, cement, and auto ancillaries, could emerge as promising pockets of growth.
Trading Strategy for Investors
Judging by the current momentum, I do not recommend over-investing in the market. Market participants should focus on monopoly players and tariff-proof stocks such as CDSL, MCX, and Larsen & Toubro.
At present, a sense of uncertainty has gripped the market and in such conditions, capital preservation and selective accumulation should remain the top priority for both new and seasoned investors. Recent data indicate that FPIs are shifting funds from equities into debt instruments. Despite this trend, the USA and Singapore remain India’s largest FPIs.
I suggest adopting a sell-on-rise strategy near Nifty’s resistance levels of 25,200 and accumulating in phases near support levels of 23,200–23,600. Investors should also avoid heavy allocations at weak support zones if they are considering fresh investments in ETFs.
Top Five Stock Picks
My top five stock picks for the next one year are Adani Green, Refex, CDSL, CEAT Ltd., and Aarti Industries. Investors should conduct thorough due diligence to ensure these stocks are a good fit for their portfolio objectives and risk profile before investing.
Disclaimer: The views and opinions expressed by the investment advisers are of their own and not of the publication. The publication advises users to consult with their own financial or investment adviser before taking any investment decision.