The market is tough right now, and it's easy to see why. Foreign investors have pulled out over ₹1.5 lakh crores due to global issues like China’s economic changes and rising U.S. interest rates. Recent company earnings, especially in the Auto, FMCG, and Capital Goods sectors, were disappointing. October saw higher inflation than expected, which delayed the RBI's plans to lower interest rates, causing the market to drop. Domestic investors are playing it safe, holding onto cash.

Private investment is slow because companies are not using more than 75% of their production capacity, and urban spending is weak due to high food prices. While rural spending is picking up, it’s still not moving fast.

On the positive side, the government is aiming for 7% GDP growth and wants to bring inflation below 5%. In the next 100 days, government spending on infrastructure and manufacturing should increase, which will quickly boost these sectors. Inflation is expected to stabilize in the next six months, which should help consumer spending recover after that. Once companies start using 80-85% of their capacity, private investment is also expected to grow.

The Indian stock market has dropped by over 10% from its peak, but now it's trading at a cheaper price than usual. We don’t see much further decline from here, and the upcoming Q3 earnings will play a big role in shaping the future.

While there may still be short-term ups and downs, the Nifty's fair value is around 24,559, which suggests a potential 10% return over the next year. Overall, the outlook for growth remains positive.

Here are 4 things you should do

1.     Do not panic and withdraw your investments. These phenomenon of market falls keep happening every 2-3 years. Last time around 2021-22, Nifty fell 18% from the top only to generate 60% returns by 2024.

2.     Do not hold money in cash waiting for market bottom.. Add additional funds if available at regular intervals. These investments act as a big boost and help in building wealth over time.

3.     Increase your SIP at least by 25%. Investing more during times like this provides greater long term returns.

4.     Be prepared to see a bit more losses as the fall can continue a bit longer before it stabilizes.