Indian investors have been on a rollercoaster ride since the last couple of weeks as first Sensex rocketed to new all-time highs and then plummeted back.
With foreign institutional investors (FII) still continuing their buying, domestic institutional investors (DII) have been busy booking their profits. Going ahead, experts are expecting stock markets to fall a little more.
Talking to The Pioneer, Escorts Security’s Ashok Agarwal feels that stock markets would continue trading under pressure though the fall might not be steep. He said, “We expect the stock market to continue trading under pressure but do think the fall would be limited. Investors should completely avoid short term trading in the current scenario and should also try to stay away from frontline index stocks. From investment perspective, people can buy every time the market corrects and should focus more on midcap shares as we expect them to perform the most.”
Indian markets have come under attack from two fronts. On one hand DIIs have been continuously booking profits while on the other hand US economy is showing signs of recovery and striking a possible fear of an early tapering in the bond buying plan of the US Federal Reserve. Citing that stock markets might turn extremely volatile in coming days, Ravi Rastogi from Globe Capital said, “Data coming from US is showing signs of recovery and this might turn out to be bad news for Indian markets. Due to early recovery, Feds might propone scaling down of the stimulus in US sooner than expected. In such a situation, we feel it is best for investors to book profits as soon as they get an opportunity and should completely avoid entering until the stock indices do not settle down and their direction is clear.”
Jagdish Thakker of Fortune Fiscal also expects markets to remain choppy and advises investors to trade very carefully. Suggesting a strategy of buy on dips, he added, “Going ahead, many major announcements are going to be made like on November 12, inflation numbers will be announced. Investors should take a cautious approach to markets as we expect stocks to fall more. It is best advised to be stock specific and focus more on companies which are posting good performance figures for their second quarter. Also, those invested should start booking profits, especially in those shares which are trading near their 52- week highs.”
Geojit BNP Paribas’s Gaurang Shah is expecting the correction mode to continue in the markets and feels it’s best to invest only when indices have stabalised. He said, “Investors should keep a close watch on inflation numbers along with Q2 results. They should avoid trading right now and wait for all the numbers to come and then decide where to trade. Also, if the markets fall sharply, investors should not panic and can invest 25 per cent of their funds in fundamentally strong companies which have posted good Q2 results.”