Benchmark Nifty 50 index has retreated nearly 2 per cent over the past five sessions after recovering over 15 per cent from April lows. The Nifty Bank index, which tracks the performance of the top 12 public and private bank stocks, has shown a similar pattern – rallying over 13 per cent before entering a rangebound phase.
Meanwhile, India VIX, the barometer of market volatility, has experienced sharp swings. On April 7, the VIX spiked 65 per cent, crossing the 23 mark, but quickly pulled back to around 13 by mid-April. It then shot up again to about 22 during the first week of May, before easing back to 16. As of now, it's hovering around 17.75. A higher VIX indicates increased volatility and a lower VIX indicates a sense of stability in the market.
Amid all this a slew of domestic and global events shaped the market – Reserve Bank of India's (RBI) liquidity injection via Open Market Operations, a 25 bps repo rate cut, Trump pausing reciprocal tariffs, IMF downgrading India's FY26 GDP growth forecast, and the unfortunate Pahalgam attack which triggered a war-like situation between India and Pakistan, followed by a ceasefire.
As the market digests these developments, lets take a look at where should investors look for opportunities in this market:
Which Sectors Offer Potential Now
Outlook Money touched base with market experts to understand where investors should seek opportunities in the current market situations.
Banks & Financials: Manasvi Garg, a Sebi-registered investment advisor, CFA, founder and CEO of Moneyvesta, said, "The RBI has cut interest rates twice in 2025, possibly marking the start of a rate cut cycle. A fall in repo rate reduces the cost of financing — including home, auto, and business loans — potentially driving credit growth and consumer demand."
Shrikant Chouhan, Head of Equity Research at Kotak Securities, suggested that investors should primarily focus on large-cap stocks, with selective exposure to mid-cap and small-cap stocks. In the banking sector, he sees value in larger banks. For mid-cap and small-cap stocks, the approach should be stock-specific, with focus on growth potential and valuation metrics, he advised.
Cement Sector: Ajit Mishra, SVP of Research at Religare Broking, said, "The cement sector is showing early signs of a turnaround, with volumes recovering after a few muted quarters. This improvement, along with reduced competitive intensity, is driving better realizations and a renewed focus on sustaining margins."
Life Insurance Sector: Mishra added that the life insurance sector also looks promising. He said the sector's valuations appear reasonable, and regulatory uncertainties are now beginning to ease, offering a more stable and attractive outlook.
Affordable Housing Finance: Mishra further suggested that select companies in the affordable housing finance segment present compelling investment opportunities. "Supported by expectations of mid-teen asset growth, potential rate cuts, and strong asset quality, this space offers a solid structural growth story going forward," he said.
Power Sector: CFA Garg said that the power sector is undergoing a structural transformation as India accelerates its transition from non-renewable to renewable energy sources. He added that several companies within the value chain are poised to benefit in the long term.
Capital Markets: The Sebi-registered investment advisor also said that the capital market is a long-term opportunity, not just a short-term play. He noted that retail investor participation has grown significantly post-COVID-19. Garg mentioned, "Sebi's efforts to empower Registered Investment Advisors (RIAs) and Research Analysts (RAs), along with its crackdown on unregulated influencers, are positive structural reforms."
