Markets Fall Amid Election Volatility: Here's What Analysts Recommend
While some analysts have suggested a pause, others are taking these falls in the market as an opportunity to buy.
Investors need to be cautious on entry and wait for the market to either "breakout or breakdown," according to Aditya Arora, founder and multi-asset research analyst at Adlytick.in. The Nifty and Sensex broke a three-day winning streak and dipped on Wednesday.
It's better to take a pause as the markets are "all over the place" with an equal amount of positive and negative cues. The markets could either see a rally or see a significant downward trend, he said.
The NSE Nifty 50 ended 17.30 points, or 0.08%, lower at 22,200.55, and the S&P BSE Sensex closed 117.58 points, or 0.16%, down at 72,987.03.
"We also have elections coming up; it's better to take a pause when we talk about large-cap and small-cap pockets. Stock-specific moves will continue because there is less dominance of international investors in that case. If there is good news, then a lot of stocks are jumping up," Arora told NDTV Profit.
While Arora has suggested a pause, Hemant Shah, fund manager at Seven Islands PMS, said that they are taking these falls in the market as an opportunity to buy. Elections are an exercise and India's story is much bigger than the elections, he said. "I think June 4 is just a date. So, barring two weeks before and after, markets will take its own course."
Looking at the current earnings season, Shah is positive on manufacturing and capital goods. India's manufacturing story has just begun and if the government comes back to power, then the momentum of growth will continue, according to him. The solar sector and some large pharma companies are also good bets, he said.
Private banks may be in the red currently as FIIs are moving away, but after the elections, as that changes, private banks will see an upside, said Nirav Asher, head equity research analyst at Latin Manharlal Sec Pvt. Currently, investors can add HDFC Bank Ltd. in small quantities as the bank has potential and the fundamentals are intact, he said.
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