After the Indian stock markets opened in green with the Sensex and Nifty surging on BJP’s BS Yeddyurappa swearing in as the new CM, market experts advise investors to be cautious before putting in money into Indian stock markets, as stock markets could remain volatile. According to experts, SIPs may cushion investors against the volatility in the stock market. “Mid-cap stocks, which have been beaten down because of the SEBI classification related selling by the mutual funds should start doing better from June, once that selling will abate. We are advising investors to invest in the life insurance sector companies, asset management companies, housing and the FMCG sector,” V. K. Sharma, Head – PCG and Capital Market Strategy, HDFC Securities said.
According to Rahul Sharma, Senior Research Analyst at Equity99, uncertainty in markets may continue to prevail due to higher oil prices, weakening rupee, rising geopolitical tensions and political risk in India. “Investors are advised to remain cautious and watch for any developments closely in the current volatile market. Keep watch on companies that will be announcing their quarterly financial results. Have a stock specific approach, buy on dips,” said Rahul Sharma, Senior Research Analyst at Equity99.
Even as the 30-share Sensex closed in the red for the second consecutive day following Karnataka elections, Ajay Bodke of Prabhudas Lilladher said that the upside from current levels looks capped for investors. “The upside for the stock markets clearly looks capped at this stage, however, following this event, in case of a meaningful correction, it may be a good time,” Ajay Bodke CEO & Chief Portfolio Manager, PMS at Prabhudas Lilladher told FE Online.
On similar lines, Gautam Chhaochharia said in an interview to ET Now, “But yes, fundamentally our base case for Nifty for December 2018 still remains 10500 and if I look at our upside downside scenarios also, the risk reward is definitely not attractive. Our recommendation to investors is not to get in or buy at these levels. They will get better opportunities later in the year.”
According to Bodke, the markets will wait for clarity to emerge in the state, as what happens there could be a near-term sentiment indicator to 2019 polls. “If the BJP gets forms the government, it will send a signal to stock markets that the economic and social policies rolled out by the Narendra Modi-led government will get a led-up,” Ajay Bodke had said.
According to investment advisor Sandip Sabharwal, the markets could become interesting for long-term investors after a correction. “The Karnataka elections got built up as a big event although its impact on the markets it limited. Markets today are grappling with twin forces, there is revival in the economy and corporate earnings on one hand and adverse macro factors like a falling INR and rising crude prices on the other side. On balance risks are on the downside at this stage. After a corrective move markets could again become interesting from long term investors perspective,” Sandip Sabharwal told FE Online.