Market correction nearing its end; bet on banking, pharma: Rohit Srivastava

After a sharp correction over the last few trading sessions, investors are grappling with questions about whether the market has further downside ahead or if the current weakness is creating fresh buying opportunities. According to Rohit Srivastava, Founder, Strike Money Analytics & Indiacharts the ongoing correction may be closer to its conclusion than many fear, with select sectors showing encouraging signs of strength.

Nifty Approaching a Key Support Zone

While benchmark indices have witnessed pressure in recent days, Srivastava believes the market is approaching an important technical support area that could potentially mark the end of the current correction phase.

“So, from the bottom that we made in April, which was at 22,182, and then we peaked in April near the end at around 24,601, and we take a 61% retracement of that, we get a level closer to 23,077. So, that, I think, becomes the final major support for this dip that is going on, so that leaves around 80 to 100 points still on the downside. But that also means that the risk may be limited when we think of how much more downside there is. We should, of course, wait before we actually can make some kind of entry point. But what we are looking at is the potential for a possible turn in the market from down to up once we are done with this selling. So, patience, but we are getting to the end of this correction.”

The assessment suggests that while some near-term weakness cannot be ruled out, the broader risk-reward equation may gradually begin shifting in favour of investors willing to wait for confirmation of a market turnaround.

Banking Emerges as a Preferred Bet
Among sectors, banking appears to be one of the strongest candidates for fresh investment ideas during the current market decline. Srivastava highlighted a notable divergence between the benchmark Nifty and Bank Nifty, suggesting relative resilience in financial stocks.
“As a sector, it is something we have been avoiding for most of the year, and I have not exactly been positive on it for a long time. So, IT is not a sector I recommend at any point in time till the worst is very, very certainly over. I do think banking is a good place. In fact, there is an interesting divergence between banking and Nifty, where the Bank Nifty has not broken the lows that it made in May, whereas Nifty has already done so. So, there is some kind of a positive divergence between the two. So, banking comes across as one segment where we would want to very definitely find ideas to buy into in this dip.”The comments indicate that investors looking for relative strength amid market volatility may find banking stocks better positioned than several other sectors.

Energy and Metals Gain Momentum
Apart from financials, Srivastava sees merit in sectors that have been benefiting from improving commodity trends and stronger underlying demand dynamics.

“The other areas that could be of interest could be going back to the energy sector, which was performing pretty well, and also metals. People often may miss out that you are seeing a strong rally in metals, but also metal prices. Like overnight, you have seen gains in copper, zinc, nickel, everything, and that could result in extended gains in the metal sector as well.”

The rise in industrial metal prices globally has strengthened the outlook for metal producers, potentially extending the sector’s recent outperformance.

Autos Still in Consolidation Mode
While the automobile sector remains an important part of the broader market story, Srivastava believes the segment may require more time before a decisive uptrend emerges.

“Well, autos seem to be consolidating. The real big kick for autos will come only when we can actually get a turn in the interest-rate cycle. They may still do well. There have been outperformances in certain segments of the two-wheeler pack, like you saw a very strong rally in between in Tata Motors passenger vehicles, so that kind of thing is happening. But it is still not across the board. So, give it a while for the other stocks to consolidate and pick up. So, we will be a little slower in picking up on the auto side.”

The view suggests that although pockets of strength exist, investors may need to be selective rather than expecting a broad-based rally across the entire auto universe.

Pharma’s Long-Term Breakout Remains Intact
One of the most constructive sectoral outlooks offered by Srivastava was for pharmaceuticals. He pointed to a significant technical breakout in the Nifty Pharma index that could support sustained gains over the medium to long term.

“Yes, the pharma index is on a pretty strong footing if I take a slightly longer-term view. We broke beyond 23,500 on the Nifty Pharma index; that was a breakout of a two-year consolidation. Now, it is only pulling back to take support there, and once it is done, then we should be headed towards possibly 30,000-plus on the pharma index in a one-, one-and-a-half-year kind of time horizon.”

As markets navigate a period of correction and uncertainty, Srivastava’s outlook suggests that the bulk of the downside may already be behind investors. While caution remains warranted in the near term, sectors such as banking, metals, energy, and pharmaceuticals appear better positioned for the next phase of market leadership. At the same time, IT remains a sector to avoid until clearer signs of recovery emerge, while autos may require more patience before delivering broad-based returns.