Even as we move in New Year 2019, stock market experts say that a host of factors including upcoming Lok Sabha Elections and global factors such as crude oil shocks could add to stock market volatility in New Year 2019.
Even as we move in New Year 2019, stock market experts say that a host of factors including upcoming Lok Sabha Elections and global factors such as crude oil shocks could add to stock market volatility in New Year 2019. Therefore, any short term or medium term investor should avoid investing with short term or medium term perspective, as; volatility may hurt the overall returns, says Epic Research CEO Mustafa Nadeem. “The important point here is that post election as it settles down the long term trend remains intact and the overall bullish nature of the market unfolds itself for long term investors,” he noted.
According to B Gopkumar, ED & CEO, Reliance Securities diversification and quality will be the key for 2019. Quality stocks ensure higher earnings visibility and help generate positive returns during volatile times, he noted.
“The first half of 2019 is likely to be more challenging than the second half. Market volatility is likely to reduce after the elections and focus will completely shift towards bottom-up approach. In the second half of the year, the mid-caps and small-caps are likely to perform better while the first half could be more focussed on quality, earnings growth and large caps,” Gopkumar said in a note to FE Online.
According to Ajay Bodke of Prabhudas Lilladher, investors must stick to businesses that display solidity in balance sheets, have less reliance on leverage, generate free cash flows and have high return ratios. “Diversify your risks across sectors and avoid heavy concentration in one or two sectors as portfolios would be prone to large drawdowns if these sectors lose momentum. Closely watch liquidity risks as liquidity vanishes quickly in a turbulent market especially in micro, small and mid-caps,” he added.
Given the major events such as the elections and global markets continue to break important supports there could be headwinds for the stock markets. So how much can Sensex and Nifty rally? “For Nifty the range seems to be 12,100 on the upside to 9,400 on the downside. Sensex, on the other hand, may oscillate between 39,800 to 32,300,” Mustafa Nadeem told FE Online.