A combination of geopolitical conflicts, sticky inflation, elevated interest rates, supply-chain disruptions and trade wars has created fresh uncertainty across global equity markets, leaving investors struggling to navigate one of the most complex macroeconomic environments in recent years.
From tensions in the Middle East to growing fragmentation in global trade and continued pressure on commodity prices, multiple headwinds have battered investor sentiment worldwide. However, instead of witnessing a sharp market crash, investors are seeing prolonged sideways movement and extended consolidation across global and Indian equities.
Raj Dandu, Vice Chairman of the Dandu Group, said that markets are currently undergoing what analysts call a “time correction”.
“What we are experiencing is the classic exhaustion of liquidity-driven momentum giving way to macroeconomic reality. A price correction is sudden and violent, but a time correction is a true test of investor patience,” Dandu said in an interaction.
“The global economy isn’t collapsing, but its engine is being choked by two structural forces: ongoing kinetic conflicts in Europe and the Middle East, and a highly fragmented trade war between major economic blocs. Markets are trapped in a holding pattern—earnings are catching up to historical overvaluations while valuation multiples compress in an orderly, slow-motion manner,” he added.
Dandu said modern geopolitical conflicts are no longer isolated events that markets can quickly absorb.
“The nature of these conflicts has changed from isolated events to systemic disruptors. Earlier localized shocks briefly affected sentiment; today’s trade and physical wars directly impact supply chains, commodity flows, and currency stability,” he said.
“When you weaponise supply chains, impose sweeping chip export controls, or restrict shipping through vital maritime straits, you introduce structural friction and costs into every layer of global trade,” he added.
According to him, corporations globally are now shifting from “Just-in-Time” efficiency models to “Just-in-Case” logistics focused on resilience and redundancy.
“Corporations cannot optimise for absolute efficiency anymore; they must optimise for redundancy and resilience. This transition from ‘Just-in-Time’ to ‘Just-in-Case’ logistics is inherently inflationary,” Dandu said.
He added that because central banks cannot aggressively cut rates without reigniting inflation, markets are likely to remain in a prolonged consolidation phase.
“Because central banks cannot easily cut rates to rescue markets without risking a resurgence in inflation, equity indices are forced into an extended consolidation phase as they adjust to lower structural profit margins,” he said.
Despite India’s relative strength compared to many emerging markets, Dandu cautioned against assuming that Indian equities can completely decouple from global weakness.
“India is decoupling conceptually, but it cannot decouple mathematically. Global gravity eventually catches up with every market,” he said.
“Our high valuations require sustained earnings growth of 15% to 20% to be justified. When global growth slows down due to trade frictions, our export-driven sectors—like IT services, chemicals, and pharmaceuticals—naturally feel the pinch,” Dandu added.
At the same time, he believes India’s internal macroeconomic foundations remain significantly stronger than in previous cycles.
“Our macro foundations are vastly superior to previous economic cycles. Corporate leverage is at multi-decade lows, the banking system’s balance sheet is incredibly clean, and the domestic investment equity flows via mutual funds have become an unyielding wall of support,” he said.
“The Indian market is going through an essential, healthy time correction where price levels flatline while corporate earnings expand underneath to match those valuations,” he added.
In this volatile environment, Dandu said investors should focus on sectors backed by long-term structural tailwinds instead of chasing short-term momentum.
“We are prioritising sectors that are backed by unstoppable structural tailwinds and are relatively insulated from short-term global macro noise,” he said.
According to him, the Dandu Group is currently concentrating on five key sectors: defence, healthcare, renewable energy, Battery Energy Storage Systems (BESS), and data centres.
On defence, Dandu said, “With geopolitical friction escalating and India aggressively pushing for defence indigenisation (Atmanirbhar Bharat), defence localisation is a massive, multi-decade secular growth driver.”
Discussing healthcare, he said, “Rapidly evolving domestic healthcare demands, combined with India’s emergence as a highly competitive global hub for clinical manufacturing and medical services, makes healthcare an exceptionally resilient sector.”
On renewable energy, Dandu said, “The energy transition is non-negotiable. We are heavily focused on green power generation infrastructure, primarily scaling utility-scale solar and wind projects.”
Explaining the importance of BESS infrastructure, he said, “Renewable generation is intermittent. The real unlock for green energy is grid stability, which makes BESS the next major frontier of hard asset infrastructure investment.”
On data centres, Dandu said, “As cloud computing, corporate digital transformation, and India’s public digital infrastructure expand exponentially, data centres have effectively become the mission-critical digital real estate of the 21st century.”
Dandu also believes India could emerge as a major beneficiary of the ongoing global manufacturing diversification away from China.
“Net-net, India stands to emerge as a structural beneficiary, but it requires masterful execution,” he said.
“The ‘China+1’ strategy is no longer a boardroom talking point; it is a defensive necessity for multinational corporations,” Dandu added.
According to him, India’s Production Linked Incentive (PLI) schemes and manufacturing push have helped position the country favourably, although competition from Vietnam, Mexico and Eastern Europe remains intense.
“The tariff wars present an open window, but to maximise it, we must continually lower our internal cost of logistics and cut through bureaucratic friction,” he said.
“We believe that sectors focused on advanced manufacturing, defence localisation, and clean energy infrastructure will see the highest capital inflows over the next three to five years, irrespective of broader global market volatility,” Dandu added.
According to Dandu, the investment strategy during a prolonged consolidation phase is very different from investing during a bull market.
“The playbook for a time correction is vastly different from a roaring bull market. In a bull market, beta wins; in a time correction, cash flows and capital discipline win,” he said.
“This is the time to pivot toward businesses with strong pricing power—companies that can pass on inflationary raw material costs to consumers without destroying demand,” Dandu added.
He also advised investors to maintain liquidity and use market consolidation phases to accumulate quality assets.
“Secondly, preserve a portion of your dry powder. Sideways markets offer brilliant accumulation windows,” he said.
For retail investors, Dandu stressed the importance of disciplined SIP investing.
“For retail investors, maintaining a disciplined Systematic Investment Plan (SIP) is crucial because a time correction allows you to accumulate more equity units at reasonable valuations,” he said.
“For institutional allocators, we favour a barbell strategy: high-yielding, defensive value on one end, and highly specialised, policy-driven growth sectors like defence and infrastructure on the other,” he added.
At the same time, he cautioned investors against excessive leverage and speculative businesses.
“Avoid hyper-leveraged companies and speculative, pre-revenue tech,” Dandu said.
Looking ahead, Dandu said investors should closely watch three major macro triggers.
“We monitor three primary metrics. First is the stabilisation of global energy and commodity corridors,” he said.
“If geopolitical tensions de-escalate enough to normalise shipping routes and energy supply chains, inflation will quickly cool down,” Dandu added.
“Second is clarity on the peak global interest rate cycle; once central banks shift cleanly to an accommodative stance, global risk appetite will return,” he said.
Finally, he said the revival of private sector capital expenditure alongside government infrastructure spending will be a key signal for Indian markets.
“When private sector Capex fully fires up alongside public infrastructure spending, it will signal that Indian corporate houses have digested the macro risks and are confident in long-term demand,” Dandu said.
Until then, patience remains the key strategy for investors navigating volatile global markets.
“Until then, patience is the ultimate virtue. Market consolidations are simply the foundation for the next structural leg up,” he added.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)