The continuous imposition of tariffs by US President Donald Trump has resulted in a significant drop in the equity markets, creating an opportunity for conservative investors to build long-term wealth.
The top 100 companies, representing various sectors, have seen their stock prices fall dramatically, ranging from 61% to 3% below their 52-week highs. On average, these top companies have experienced a 25% decline in value.
Among these top companies, the market capitalization of the top 10 companies amounts to ₹15.53 lakh crore, including three Adani Group companies. These companies have seen substantial decreases in their stock prices, with Adani Green Energy falling by 61% and Adani Energy Solutions and Adani Power dropping by 45% and 44% respectively.
The Adani Group faced challenges last year when the US government accused them of bribery in securing solar power contracts. However, the situation improved when the newly-elected Trump government decided to pause the bribery charges, easing concerns about the Group’s financial stability.
Additionally, fears about Tesla entering the Indian market and criticism from Trump regarding high import tariffs on cars have negatively impacted automobile stocks like Tata Motors and Bajaj Auto, which have experienced declines of 45% and 41% respectively.
Experts suggest that while large-cap stocks provide a level of stability during market turbulence, investors with a higher risk tolerance and a long-term perspective may consider investing in high-quality small-cap stocks with solid fundamentals.
The recent market corrections have revealed the vulnerability of even the most established large-cap companies to market trends. Therefore, investors can potentially generate higher returns by leveraging the expertise of experienced fund managers to explore the growth opportunities in small-cap stocks while managing risks effectively.
Overall, the current market conditions present an opportunity for investors to capitalize on discounted prices of top companies and potentially create long-term wealth.
