last week was a rollercoaster ride for investors as equities bounced between heavy profit booking from institutional investors and sustained buying from foreign institutional investors (FII).
Over last week, FIIs poured over Rs 5,000 crore in the Indian equity markets. Going ahead, experts are expecting markets to remain choppy for the next a few days but on the longer horizon would yield good returns.
Talking to The Pioneer, Ashok Agarwal from Escorts Securities stressed that the sharp 200 points recovery seen in Sensex on March 14 is a sign that the rally would continue on the longer term. He said, “Sharp recovery came totally unexpected but also emphasises that markets would surge more on the longer term. We are expecting equity indices to gain another 20- 25 per cent by the end of this year.”
While he is expecting good returns from the markets, Agarwal also warns investors of a possible sharp correction immediately after the general elections are over.
As a strategy for investors, he advises, “Short term traders should use every rise to book profits while the long term investors should buy every time markets correct. Investors should focus more on bank, metal and real estate shares as they have already corrected a lot and would not outperform their peers.”
For Fortune Fiscal’s Jagdish Thakkar, ease in inflation was the primary reason behind the sharp recovery in the stock markets. As per him, the overall sentiment is extremely positive and expects the markets to start on a positive note, this week. “We expect the recovery to continue and frontline indices might soon again touch their record highs,” Thakkar added.
While listing the sectors investors should look for opportunities to buy, Thakkar said, “We are expecting fresh buying in pharmaceutical, automobile and technology stocks. Investors should keep an eye on these sectors and book profits from capital goods and infrastructure shares.” He also advised investors to book profits by the end of March and wait for the markets to correct before reinvesting.
In view of Kunal Saraogi from Equity Rush, the current bull rally would continue in the markets as more and more retail investors would again start buying. He stressed, “Till now the participation from the small or retail investors have been minimum but with FII buying backing the rally, more investors would again enter the markets which in turn would indices to new all time highs.”
He still maintains his “buy on dips” strategy and urges investors to look for fundamentally sound stocks to invest in and avoid buying shares which have already shown a strong run up. “Investors should focus more on beaten down sectors, especially bank, automobile and real estate stocks. Also avoid pouring in all your funds in one go and buy small quantities at regular intervals.”
Unlike other experts, AK Prabhakar, a senior market analyst is more skeptical than optimistic on the immediate future of the equity markets. Although he agrees that on the longer term markets would give good returns to investors, on the shorter term he is expecting a sharp correction and thus advices investors to stay extremely cautious.
“We are expecting a sharp correction to start very soon in which Sensex might fall by 1,000 points. Short term traders should now avoid fresh buying and look for opportunities to book profits,” Prabhakar said while warning traders.
Markets are expected to register significant rise on the long term and hence for the long term investors there is nothing to worry, he adds. As his best pick for investors, Prabhakar added,
“Investors should buy in metal stocks as they would post the biggest gains on the longer term. Investors should avoid FMCG shares and wait for the correction to get over. long term investors should use this correction as an opportunity to buy.”