Despite a year filled with ups and downs, the benchmark Sensex was still able to rise by 9 per cent in the calendar year 2013 but going forward analysts expect Indian markets to remain volatile in calendar year 2014. But after the recent recovery shown by markets, analysts also added that on the shorter term markets might touch a new record high.
While advising investors not to blindly invest in stocks that are already at their highest levels, Rajesh Satpute of Mangal Keshav Securities said, “In the current market, investors should follow the strategy of sell on rise and book profits when even there is an opportunity. As far as making new highs is concerned, if the indices consolidates on the current levels then a possibility of markets touching new record levels is quite high.”
Satpute thinks that in the coming days, rate sensitive sectors would outperform the markets. “Traders should buy on dips and focus more on sectors like banking, real estate and automobile. I would advise investors to trade carefully in technology stocks as they already have shown a strong rally. Also, investors and short term traders should avoid capital goods stocks as they might fall further.”
Fortune Fiscal’s Jagdish Thakar expects markets to continue with the rally for some more time. He said, “Markets look slightly positive in the coming days and might even touch new highs. This market rally would be majorly supported by banking and infrastructure stocks and traders should keep a close watch on them. Traders already holding shares of pharmaceutical and information technology companies should now start booking profits as we expect them to correct now. Also, overall, short term traders should use every rise in markets for profit booking.”
For Ashok Agarwal from Escorts Securities, the run up to general elections is going to be the most critical time for the stock markets. He said, “The current market rally might take indices to all time highs but the real direction of the equity markets would only become clear after the general election. If we fail to get a stable Government then might see heavy sell off in the markets as foreign investors would start pulling out of Indian equities.”
Calling the current market as investors markets, Agarwal said, “This market is best suited for long term investors who should invest every time the index falls. Short term traders should not expect big gains and book profits as soon as possible. Also, traders should not take huge risks and try to trade in a range in order minimise their losses.”
While most of the analysts are a expecting to see a new life time high in the short term, they are also little skeptical about whether the indices sustain on these higher levels. Unlike most, Kunal Saraogi from Equity Rush is extremely confident that the markets would continue to perform in the coming months. He said, “I am expecting the markets would continue to rally and make new highs in the coming month. Hence I advise traders to buy stocks every time they correct and hold it for a while. As far as the stocks that would perform, I think the best returns would come from public sector banks as they have already fallen a lot and now would show a strong bounce back. But traders should stay away from pharmaceutical and information technology shares as I am expecting heavy profit booking in these sectors.”