Despite sustained buying for foreign institutional investors (FII), Sensex slid by nearly 190 points on Friday as domestic institutions and investors went for heavy profit booking. Expecting this to be a sign for things to come, market experts urge retail investors to book profit on every rise and avoid fresh buying in the current market.
While talking to The Pioneer, Jagdish Thakkar from Fortune Fiscal said that the equity markets are expected to open this week on a negative note and going ahead might continue to correct. “We expect the profit booking to drag the markets further down and on a medium term basis, Sensex might even fall back to 22,000 levels,” Thakkar added.
While Thakkar is certain that the correction would continue, he advises that investors should use every small bounce in markets to book profits. As his strategy for retail investors, Thakkar said, “Investors should book whatever profits they are getting on every rise in markets and should complete avoid buying until the election results are announced.” He further added that maximum selling pressure might be seen in cement, banking, capital goods and automobile sec tors and hence investors should completely avoid them.
Certain that profit booking has started, Escorts Security’s Ashok Agarwal stressed that until FIIs don’t start selling, investors should not panic. As per him, if FIIs continue to buy in Indian markets then the profit booking would be short lived. While giving his view on markets, Agarwal said, “We expect the markets to stay range bound in the short term with a limited downside. Also we do not expect any major bounce backs in the next few days.”
Advising investors to stay cautious, Agarwal added, “Wait for correction to end and then buy stocks of companies which post good quarterly results and are showing strength. Also, it is best to trade with a short term approach and book profits on every opportunity.”
Kunal Saraogi from Equity Rush is quite bullish on Indian markets for the longer term but does expect a correction from current levels. Commenting on the current market, Kunal Saraogi said. “Till now markets have rallied to new highs on back of FII buying but now Indian markets have become expensive and we expect then to correct.”
He also warned investors of a possible selling by FIIs and advised, “Investors should wait and see if FIIs start profit booking. If it happens, investors should immediately book profits as markets might show deep corrections. But if FII buying continues, the correction would be very shallow and markets would bounce back and give investors an opportunity to book profits on the higher levels.”
Unlike other experts, AK Prabhakar, a senior market analyst holds a slightly different view. As per him, markets would correct only slightly and the rally would again start. “The overall market trend is still positive for the medium to long term. On the short term, a small correction is expected but it would soon be over and markets would again start to rise towards their record levels.”