Known for his cautious market outlook, Sharma pointed out that India’s bull market may not have much steam left.
“Indian bulls have a five-year shelf life,” he said, noting that although the market has seen strong performance recently, its momentum could slow in the coming years.”If the bull has run very fast, like in the case of our small-caps, that bull is a tired bull which falls at the slightest of trouble,” Sharma explained.
Shankar Sharma Forecasts Zero Returns for Nifty Over Next 5 Years
According to Sharma, the benchmark Nifty 50 index is set to offer zero returns from the September 2024 highs over the next four to five years.His comments came as a contrast to Arora’s optimistic view of India’s long-term potential. However, Sharma was firm in his forecast, suggesting that volatility will increase in the interim, and although short-term rallies are inevitable, they may be deceiving.
“In dollar terms, you might see negative returns,” Sharma warned, attributing this to the global economic challenges and rising uncertainties, particularly from the US-China tariff wars.
Market Volatility and Global Challenges Weighing on India’s Performance
Sharma also touched on the unpredictable nature of markets, stating that while India’s market is “bottom-up”, meaning that stock performance is largely determined by individual companies rather than broad market trends, investors should brace for volatility. He reflected on his personal experience, noting, “I tried to sell everything I could in July 2024, when markets recorded strong gains. However, I got stuck with some investments,” he said. “I am hoping for a bull market in 2030.”
The concerns raised by Sharma echo broader worries about India’s market valuations. While the Indian stock market has experienced impressive growth, some analysts argue that high valuations could be a risk factor for future returns.
Bear Market Ahead for India, Warns Shankar Sharma
While India has enjoyed a significant bull run, Sharma’s cautionary outlook points to the possibility of a downturn. His remarks on the market’s “shelf life” suggest that the current period of growth could be nearing its end, with zero returns on the horizon over the next few years. The impact of global events, particularly the US tariff wars, has raised concerns about the sustainability of India’s growth trajectory. Sharma emphasised that though short-term rallies may occur, investors should be prepared for potential declines in the coming years.
