Radhika Gupta, the chief of Edelweiss Mutual Fund, has offered a straightforward piece of guidance for investors navigating turbulent market conditions: do nothing. In a recent post on the social media platform X, formerly known as Twitter, Gupta emphasized that maintaining composure during periods of market instability often yields better outcomes than taking hasty actions.
The Cost of Action in Volatile Markets
Gupta pointed out that investors who react impulsively to market fluctuations might find their decisions more expensive in the long run. She stated, "The moves across equities, debt, and commodities over the last month have been a real test of patience and the ability to stay calm in a storm. Those who have kept away from FOMO — positive and negative, watched a little less news, and stuck to their allocations will do well. Action is more expensive than we imagine." This advice underscores the importance of discipline and a long-term perspective in investment strategies, especially when emotions run high.
Market Context: Budget 2026 and STT Changes
Gupta's remarks come at a critical juncture for Indian markets, which experienced significant volatility following the announcement of Budget 2026. Finance Minister Nirmala Sitharaman proposed key changes to the Securities Transaction Tax (STT), including:
- Raising STT on futures contracts from 0.02% to 0.05%.
- Increasing STT on options premiums and exercise of options to 0.15% from 0.1% and 0.125%, respectively.
These adjustments initially led to market downturns, testing investor resilience. However, the situation shifted dramatically with the confirmation of a major trade agreement.
India-US Trade Deal Sparks Market Rally
Hours after Gupta's post, during today's market opening, Indian indices surged to new highs. The Nifty 50 reached an intraday peak of 26,341, while the BSE Sensex climbed to 85,871. Within the first 15 minutes of trading, this rally resulted in a wealth expansion of approximately ₹13 lakh crore for investors. The total market capitalization of companies listed on the BSE soared to ₹468.32 lakh crore, reflecting widespread buying activity across various sectors.
Experts attribute this market jump to the finalization of the India-United States trade deal, which has alleviated uncertainty and fueled optimism among investors. Chief Economic Advisor V Anantha Nageswaran highlighted that the reduction of reciprocal tariffs to 18% by US President Donald Trump removes "the biggest stumbling block" for foreign capital inflows. This development is seen as revitalizing India's "China + 1 strategy," positioning the country favorably in global trade dynamics.
Background on Foreign Investment and Trade Agreements
Since August 2025, Foreign Portfolio Investors (FPIs) have withdrawn around $12 billion net from Indian stock markets, adding to the volatility. The India-US trade deal, however, marks a turning point. In a post on Truth Social, President Trump described Prime Minister Narendra Modi as one of his "greatest friends" and outlined key aspects of the agreement:
- India will cease purchasing Russian oil.
- India will increase imports from the United States and potentially Venezuela.
- India will reduce tariffs and non-tariff barriers against the US to zero.
- India commits to 'Buy American' and purchase $500 billion worth of US agricultural, coal, energy, and technology products.
While Prime Minister Modi confirmed on X that the US has lowered tariffs on Indian products to 18%, specific details of the deal remain undisclosed. This agreement, coupled with the recent India-EU trade pact, means India now has solidified trade relationships with two of its largest partners, enhancing economic stability and investor confidence.
In summary, Radhika Gupta's do nothing mantra serves as a timely reminder for investors to avoid knee-jerk reactions amid market swings. As India navigates policy changes and international trade developments, maintaining a steady investment approach could prove crucial for long-term financial success.
