Amid turbulent currency movement, Indian markets ended on a positive note last week but experts feel the waters ahead are going to be much choppier. Experts stressed that investors should be prepared for another round of selling in the coming days but should again start investing a little portions of their funds.
Commenting on the poor GDP numbers, Ashok Agarwal from Escorts Securities said, “GDP numbers are far below the market’s expectation and its impact will be visible on the markets. We expect the stock markets to trade under pressure and investors should be prepared for heavy selling.”
Retail investors have been the biggest losers since the past a few days and trying to guide them, Ashok added, “Investors should not panic and should start investing again the markets but they should invest in a staggered manner. Companies which have corrected a lot but are fundamentally good should be the first preference.”
Jagdish Thakkar from Fortune Fiscal said, “Due to the bad GDP data, markets are certain to start the week under pressure. While rupee has recovered, we still feel the problem is not over and in the coming days expect the currency to remain volatile. Banking and automobile shares would see a lot of selling pressure and investors should trade cautiously.”
In August, foreign institutional investors in the last two months have sold stocks worth Rs 12,008 crore and as per Vivek Negi from Finethic Wealth, the FII selling would again resume going forward. He said, “After the disappointing GDP numbers, we expect the FII selling to gain start. The foreign investor sentiment is already negative and with such bad GDP numbers, foreign investors are now more worried about the country’s economic environment.”
As a precaution to the investors, Vivek said, “Investors should trade carefully especially in banking and infrastructure shares as we expect these sectors to fall further. Also Pharmaceutical sector which till now was outperforming the markets might see profit booking in the coming days.”
While most of the analysts are cautious, Geojit BNP Paribas’s Gaurang Shah warned of the possible heavy selling that would soon be hitting the India markets. He said, “Markets, for sure, will trade under pressure in the coming days and with the kind of GDP numbers and deficit figures released, there is a strong probability that Indian might have to face a downgrade from international banks and rating agencies. If this happens, investors should buckle up for heavy selling from all sides.”
In all, experts feel that investors have to scrutinise their portfolios carefully and should not panic is the selling again starts because amid FIIs existing and Indian markets falling, investors will have plenty of opportunities to buy fundamentally sound shares and very attractive prices.