DSP Mutual Fund's April 2026 Netra report highlights a shift in the equity market, moving away from a conservative stance as valuations begin to stabilize. The Nifty index is currently trading at around 19 times earnings, close to its long-term average of 18.9 times. While this suggests that the market is not becoming cheaper across the board, large-cap stocks, particularly in sectors like banking, IT, healthcare, and fast-moving consumer goods (FMCG), are now trading at or below historical averages. In contrast, small- and mid-cap stocks remain elevated, indicating that adjustments in this segment may still be ongoing. Market indicators show signs of stress, with weakened breadth and increased volatility, as evidenced by the India VIX. Despite these challenges, external factors such as a weaker Indian rupee may improve foreign investor interest. DSP advises a cautious approach, recommending gradual increases in equity exposure while focusing on high-quality businesses. Investors should be prepared for changes rather than attempting to time the market's bottom.