The recent 4% Nifty correction has brought the Indian index to an attractive valuation level for medium- to long-term investors, Kotak Neo’s head of equity research, Shrikant Chouhan, said on October 27, 2026. His assessment is an outlook, not a guarantee of returns.

Key Takeaways

  • Chouhan said the index had repeatedly found support around 22,200.
  • He favored private banks, selected defense stocks and pharmaceuticals, while urging caution on insurance, hospitals and commodities.

Nifty correction and technical levels

Chouhan said investors entering at current levels with a six- to 12-month horizon could see positive returns. He said valuations had fallen significantly compared with previous years.

On technical measures, he identified 22,200 as a level where the market had repeatedly found support. If the Nifty crosses 22,800, he said, it could recover quickly toward 23,200. That recovery is conditional on the index first crossing the threshold.

Sector preferences and market risks

Chouhan expressed a preference for private banks and selected defense companies. He also highlighted growth potential among pharmaceutical companies, particularly contract development and manufacturing organizations, following second-quarter results.

He advised caution on insurance, hospitals and commodity stocks, citing regulatory interventions affecting healthcare and insurance and near-term pressure on commodities from a rising US Dollar Index.

Chouhan also flagged elevated crude oil prices and interest-rate trajectories as risks. He said domestic quarterly earnings were providing stability, while India’s limited exposure to AI-driven technology sectors was putting some pressure on sentiment.

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