When everyone is hopeful about the Indian stock market and many have predicted its growth, the Indian stock market has consistently fallen since October 2024. The NSE has declined by around 16% from its high during the same period, while the Chinese stock market and Hang Seng have consistently risen, with the latter surging over 30% in the last few months.

Since January 2025, Foreign Institutional Investors (FIIs) have sold stocks worth approximately ₹3,000 crore per day on average in the Indian market, while Domestic Institutional Investors (DIIs) have consistently invested in the stock market. The situation remains highly fluid, and tariffs imposed and proposed by the USA have further aggravated it.

As foreign money has drained out of the Indian stock market, there is little chance of a rapid vertical rise in a short span of time. Stocks from specific sectors may see short-term gains but could face sell-offs soon after. There is a need for consolidation before a sustained upward movement in stocks can begin. Given these factors, finding growth stocks will be challenging. However, certain sectors may still show upward movement depending on their performance and growth potential.

For example, the power sector is likely to outperform others. Tata Power, which is currently trading around ₹339, may be considered for trading and investment purposes. Similarly, JSW Energy, trading around ₹464, could be a good pick in this category. The growth prospects for both stocks appear highly positive, given the rapidly increasing power demand. Additionally, these stocks are insulated against any tariffs that may be imposed by the USA.

Another sector that appears somewhat promising is the automobile sector, but investors must be highly selective when choosing stocks in this category. Tata Motors is at its yearly low, and its European business is unlikely to improve anytime soon. Moreover, if import tariffs on passenger cars are lowered, companies in this sector may face stiff competition. In that case, even Maruti could face challenges.

Despite the overall uncertainty, two automobile stocks that may still show growth are Ashok Leyland (₹212) and Mahindra & Mahindra (₹2,584). Ashok Leyland has reported strong results in the past two quarters. The company has also launched new products, including light commercial vehicles, which are in high demand, and electrically powered tractors. Similarly, Mahindra & Mahindra’s products may not face stiff competition from foreign imports.

As for the information and technology sector, most companies have not demonstrated any significant growth. Stocks in this sector may be considered for trading purposes only rather than long-term investment.