Nifty down 2%: Deepak Gupta's sector-by-sector playbook for what to buy, hold, and trim

With the Nifty logging a 2% single-session fall and global risk assets selling off in unison, Deepak Gupta, Senior Fund Manager and Head of Research at JM Financial Asset Management, is not flinching. He delivered a clear, sector-specific blueprint on ET Now for investors wondering whether to wait, reallocate, or simply do nothing.

His core message: the event will pass, the pain is real but temporary, and the investors who average down methodically through this period will be in the strongest position on the other side. Continue your SIPs, keep averaging your cost, and resist the urge to go fully defensive — but do rotate within equities from high-beta to low-beta where you can.

This moment feels familiar because in Feb–June 2022, the Ukraine-Russia war triggered a comparable global risk-off event. Investors who held their nerve and continued buying through that window were, in Gupta's words, "handsomely rewarded" in the months that followed. He sees the current correction through the same lens.


"In hindsight, this could look like an opportunity where one should have added allocation towards equities — which is what we advise our clients: hold on to their nerves and continue with their SIPs,"
says Gupta.

The reallocation playbook — sector by sector

Healthcare & domestic pharma

Top pick: GLP-1 patent expiry in the next fortnight is a near-term catalyst; hospitals and diagnostics showing robust demand and strong earnings growth

Financials

Add on dips: MSME delinquency fears are "far-fetched" for now; the sector has taken meaningful underperformance — asymmetric opportunity for patient buyers

Defence

Overweight: Sentimental sell-off creates entry point; favour companies with stable earnings, limited leverage, and strong free cash flow generation

Premium consumer discretionary

Constructive: India's consumption mix is tilting toward high-end products; less exposed to crude cost pressures than mass-market peers

Consumer staples

Underweight: Higher crude = higher packaging, logistics, and transport costs; trading at high multiples with anaemic earnings growth

New-age tech

Selective: Apply a simple test: can they demonstrate consistent profitability? AI disruption risk is real — be mindful of meaningful positions in companies that cannot answer yes.

On new-age tech: the AI question

Gupta's framework for evaluating new-age companies strips out the noise: old-age or new-age is irrelevant. What matters is whether the business has a credible, near-term path to profitability and whether its model is resilient to AI disruption. He notes that many services currently taken for granted may be fundamentally altered as generative AI becomes a standard product feature — and companies unable to demonstrate consistent profitability in that environment deserve only limited portfolio weight, regardless of how far they have corrected from their peaks.