In the last two months the benchmark Sensex has surged by over 2,300 points but going ahead market experts are expecting markets to continue to correct little more.
In the last week, Sensex has corrected by nearly 500 points and experts stressed that a little more correction is on the cards. But on the longer term, experts added, markets looks positive.
Expecting markets to fall further, Jagdish Thakkar from Fortune Fiscal said, “This correction phase is going to continue for the coming a few days. Markets would continue to stay volatile and traders should stay cautious.” However, he stressed that the longer term view of markets still remain positive and fresh buying would be seen once the correction is over.
Urging investors to avoid buying on current levels, Jagdish advises investors to invest once markets starts to consolidate on lower levels. “Under this phase of correction, we expect large banks, real estate and infrastructure firms to fall the most. Investors should now look for shares in the madcap and small cap segments as they still haven’t surged as much as heavyweight shares,” Thakkar said. As his top picks, Thakkar said housing finance stocks and small banks would be the best perform in the coming months.
With Reserve Bank of India’s (RBI) monetary policy review scheduled on June 3, Ashok Agarwal from Escorts Securities is expecting markets to stay choppy. Agarwal said, “From here, I do not see a large upside in the stock markets and expect the correction to carry on. But on the longer term, I am certain that markets would bounce back.’
Expecting a status quo from the upcoming RBI policy review, Agarwal urged short term traders to be ready for high volatility in the markets for a few days. As his strategy for investors, Agarwal said, “long term investors can use this correction to buy on every dip. After a sharp rally, I am expecting large banks to take a pause while FMCG and pharmaceutical shares might surge after the correction is over. later, I am expecting information technology shares to also bounce back.”
Kunal Saraogi from Equity Rush still remains quite optimistic for the equity markets and expects the correction would not be deep. He said, “The overall sentiment of the markets is quite bullish and till now there has been very limited activity from the retail investors. Once they start to participate, markets would bounce back sharply.”
As his advice for investors, Saraogi added, “Investors should take advantage and buy on every decline in the markets. But they should focus more on madcap shares now rather than large cap counters as the next leg of the rally would be led by madcap companies.”
Unlike other experts, Ravi Rastogi, a senior market analyst is quite skeptical on the equity markets and advises investors not to buy on the current levels. “The current market is quite expensive for retail investors to participate into and going ahead I am expecting the correction to continue. The most important trigger for the markets would be the Union Budget and investors should wait until the new Government’s stand is not completely clear.”
When asked what strategy investors should follow if they wish to enter in the current market, Rastogi replied, “If the investors wish to buy then they should do it in a staggered way and buy only on the lower levels and on declines.” Expecting major reforms in the banking sector, Rastogi added, “With the new Government initiating reforms for the banking sector, madcap banks would turn out to be the best performer in the stock markets. Also investors can look for opportunities in the power sector.”