Indian markets have been caught in a whirlpool of high interest rate regime on the domestic front and series of stimulus cuts on the global front. While the economy is still battling with high inflation, the recently announced another $10 billion dollar tapering of monthly bond buying plan by the US Federal Reserve has again caused depreciation in the Indian currency.
While analysts feel the Indian equity markets would continue to be weak due to uncertainty on the short term, investors might get plenty of opportunities to invest in good stocks as on a longer term markets would perform. Talking to The Pioneer, Ashish Kukreja of Craft Wealth Management stressed that the equity markets would continue to remain weak in the coming days. He said, “We expect the markets to continue with the correction as the overall investor sentiment is quite weak. But going ahead, if the international markets start showing signs of bounce back, then the domestic markets would also rebound.”
He further added that since the elections are fast approaching, the total volumes in the stock markets would reduce and, hence, investors should avoid taking huge risks with large volumes. “Investors should keep a short portfolio of around 10 stocks and should only buy after this correction phase is completely over. But they should not hold their stocks for large gains and should book profits as and when they get an opportunity.”
Escorts Security’s Ashok Agarwal also feels that in the coming days the markets would remain uncertain and the overall momentum would downwards. “As we approach elections, markets will remain quite fragile and volatile but on a longer term we are expecting markets to perform. Since in the current scenario, everyone is extremely negative on Indian equities, it can be a good time for investors to purchase selective stocks with sound balance sheets with a medium to long term view.”
Expecting the frontline indices to fall more, his advice for short term trader is to follow the trend and avoid making any aggressive contra trades. As far as long term investments are concerned, he added, “long term investments can be done in public sector banks and other beaten down stocks. Valuations of State- run banks are already at their lowest levels and from here we do not expect them to report sharp falls. Investors can buy these shares in a staggered way with a long term view.”
With foreign institutional investors (FII) now completely focused on the upcoming general elections, Ravi Rastogi of Globe Capital Securities expects market direction to become clear after the elections results are out. He said, “Elections are now the biggest event for the Indian markets and would decide the direction of the stock indices. FIIs are completely focused on elections and would again start heavy buying if stable Government emerges in the end. Until then, we expect Indian markets to stay weak and volatile. On the short term, it is best to avoid the markets completely but long term investments can be made after the correction is over. “
While listing down all the sectors investors should keep an eye on, he said, “Our long term is very positive especially in banking, infrastructure, financial and real estate. We expect these sectors to perform on the longer term. We advice investors to keep a limited yet diversified portfolio with fundamentally strong stocks. Also investors should avoid information technology stocks now as in the coming days they might come under pressure due to profit booking.”
Unlike other analysts, Fortune Fiscal’s Jagdish Thakkar is more concerned about the short term markets. He said, “The short term situation of the equity markets is not very good. We are expecting the indices to trade in a range with a negative bias and if the FII selling continues or increases, markets might fall substantially. Since the short term markets are too weak, we advice investors and traders to stay away from equities completely. It is best to avoid until the markets start stabalising and volatility comes down. As far as buying is concerned, nobody should rush into buy stocks unless there are clear signs of revival in markets.”