It therefore considers IT more suitable for selective tactical exposure than an overweight structural allocation until there is clearer evidence of a sustained recovery in global technology spending. “Valuations also look appealing for Indian IT, and the sector has seen some rebound recently.

Still, we’re staying cautious, as deflation-related concerns are likely to keep the sentiment clouded and upside capped,” HSBC said. None of the six stocks accumulated by retail investors appeared in HSBC’s list of its top 10 India stock ideas.

The ownership data reflect that caution. 09% as the sector underperformed other parts of the market.

Institutional portfolios moved in the same direction. 55%.

Retail ownership grows, but timing record is mixedThe purchases came during a quarter in which the value of retail holdings across NSE-listed companies increased sharply. 12% at the end of March.

The picture was less straightforward when measured by the number of shares. The report’s broader performance scorecard also offers a cautionary signal for the dip-buying strategy.

Retail investors increased their holdings in 1,130 companies during the quarter. Those stocks rose by an average of 24%.

57 percentage points during the quarter. That comparison does not determine future returns, but it shows that the contrarian purchases had not yet been validated by relative price performance.

“Market tide is accelerating in favor of high growth and high quality companies,” said Vinay Paharia, chief investment officer at PGIM India Mutual Fund. Paharia said the trend had gathered pace since the beginning of the fiscal year, potentially supported by expectations of stable but higher economic growth and improved foreign fund flows.

Earnings expectations remain strong for high-growth, high-quality companies, he said, even as expectations for cyclical segments have started weakening. “Although the near-term earnings trend is tied to global developments, valuations have become conducive in several pockets—large-caps in particular trade below their long-term averages,” Mathai said.

Near-term volatility is likely to persist as geopolitical conditions evolve, according to Mathai, but short-term disruptions may have a limited effect on the intrinsic value of businesses. He said investors may consider staggered equity allocations to benefit from favorable valuations and potential volatility.

The comments provide a valuation case for selective accumulation, but neither constitutes a stock-specific recommendation on the six companies bought by retail investors. Outside technology, the strategists’ sector views remain selective rather than uniformly bullish.

Axis Direct favors sectors with strong domestic earnings visibility, policy support, healthy balance sheets and sustainable cash-flow generation. It remains overweight on financials, defence, capital goods, power and utilities, telecom, automobiles and healthcare, while adopting a selective approach toward IT and maintaining caution on FMCG and paints until margin pressures ease.

HSBC similarly favors high-quality growth companies in domestically driven sectors such as financials, automobiles, retail, services and hospitals. Within consumption, it prefers consumer discretionary companies to staples, which it considers more expensive and more exposed to rural demand and rising food inflation.

That leaves the Rs 18,000 crore retail trade dependent on company earnings rather than the simple assumption that a falling stock must rebound. For the four IT companies, the key hurdle is evidence of a sustainable recovery in global technology expenditure and client decision-making.

“As H2CY26 unfolds, we expect earnings delivery rather than valuation expansion to be the primary driver of market performance, making disciplined stock selection increasingly important,” Axis Direct said.

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