While the stock market continues to witness unabated sell-off given a host of domestic and global factors, ace equity strategist Ridham Desai says that long-term investors should buy at the current levels.
While the stock market continues to witness unabated sell-off given a host of domestic and global factors, ace equity strategist Ridham Desai says that valuation and sentiment indicators point to a buying opportunity in the Indian stock market. “This is a once in a lifetime opportunity on valuation and sentiment, and it happens very rarely. It’s the fifth time in 11 years that we are getting synchronized buy signals from valuation and sentiment,” Ridham Desai, head of India equity research and India equity strategist at Morgan Stanley, said in a recent interview with CNBC-TV18.
However, investors should not expect a V-shaped recovery, and their patience eould be rewarded in the next 12-months. “It doesn’t mean that the market does a V-shape, it doesn’t mean that stocks run away from you right, but if you are patient and you wait, I think you will be rewarded well over the next 12 months, and it applies both to broad and narrow market. In fact it applies more to the broad market than the narrow market,” Ridham Desai told the channel.
Various experts points out that the investor sentiment continues to be subdued amid the ongoing economic slowdown, NBFC crisis, and global developments. “The earnings season has ended and there are no fresh key domestic triggers. Hence, the focus will now shift to earnings recovery and investors will also take cues from global developments. Therefore, we maintain our cautious stance on the Indian markets in the near term,” Ajit Mishra Vice President, Research, Religare Broking said. Given the dampened sentiment due to FPI tax surcharge, he government should look at recovering the trust of foreign portfolio investors, said Desai.
Taking stock of the various global developments, Ridham Desai sadi that the US is at a risk of going into a recession; it’s a credible risk. “The trade war is getting murkier by the day, and India has 20 percent of its gross domestic product (GDP) from exports,” he said.