The markets are in a state of turmoil and several sectors are seeing signficant selling pressure. Moreover given the fact that Trump Tariffs kick in today, and the US President Donald Trump signalling fresh tariffs for pharma imports, the uncertainty in the market continues. The big question then is what is the right strategy in this scenario? The cardinal advice by most is there is no room for panic. Here are some key sector and stock recommendations by Kotak Institutional Equities and Motilal Oswal to add to your portfolio.
What are the experts suggesting?
Market expert Arun Kejriwal advises, “One of the key things for investors is to avoid panicking too much. One needs to also square-off short-term trades and then remain on the sidelines. I would advise investors not to be too adventurous either and not to try shorting the market because one may not be well equipped to handle short. Typically investors may look for opportunity in stocks that have fairly limited or no exposure to US exports or subject to the tariff uncertainty.”
Apart from the expert take here are some strategies from key brokerage houses to help make the right investment decision.
Kotak Institutional Equities on tackling market volatility
According to Kotal Institutional Equities, “The performance of the Indian market in the next few weeks will depend on the response of various countries to the US’s reciprocal tariffs, the behavior of retail and institutional investors and the performance of other markets in a volatile setting.”
the report add that, “We had concerns with the Indian market’s high valuations even before the current negative developments. We have long struggled with the fact that valuations are higher than pre-pandemic levels despite (1) higher global interest rates, (2) higher global geopolitical and macroeconomic risks, (3) lower volume growth and profitability risks across sectors and stocks in the short- and medium-term and (4) higher disruption risks across sectors.”
Kotak Institutional Equities on how will retail investors behave?
Kotak Institutional Equities stated that they We have limited insights into the investment behavior of retail investors to know their response to the increased market volatility. They have been price-agnostic buyers in the market both directly and indirectly (through MFs) for the past 3-4 years. We have seen some change in their behaviour in recent weeks, with modest direct selling in the market, but we do not know if this will continue or extend to their investments in MFs too (flow and stock). It is possible that declining trailing returns and increased market volatility may diminish their enthusiasm for equities.”
Kotak Institutional Equities is recommending a fairly defensive portfolio, “in line with our cautious view of the market for a while now, with large recommended overweight positions in sectors such as BFSI, healthcare services and pharmaceuticals (defensive, especially the healthcare services and domestic pharmaceuticals companies) and telecom (classic defensive). We add ABB (150 bps) to the recommended model portfolio.”
Motilal Oswal’s India strategy
Another noted brokerage house, Motilal Oswal pointed out that as the global economy grapples with a period of heightened volatility- marked by trade tensions, capital flow swings, and geopolitical uncertainty, “India’s structural story remains intact. While near-term challenges have tempered risk appetite, domestic macro indicators and earnings prospects suggest a more constructive FY26.”
While foreign portfolio investors may be cautious, “strong domestic flows continue to anchor market sentiment. Policy clarity, easing inflation, and stable political signals point to a potential inflection point for growth and earnings over the next 12 months.”
However, they warned that “with market valuations still elevated and global conditions fragile, investors must be selective. Sector rotation, valuation discipline, and earnings visibility remain central to alpha generation.”