Long-term investors should not panic and look for buying opportunities from lower levels where the domestic economy facing sectors like capital goods, infrastructure, real estate, financials should be on investors’ radar.
Indian equity markets witnessed absolute bloodbath on Thursday amid escalating tensions between Russia and Ukraine. While Sensex plunged over 2000 points in morning trade, Nifty fell below 16,600. Both Indices have corrected over 10% from lifetime highs. While current valuations are attractive, analysts and traders suggest investors to not make hasty investment decisions. Headline indices could still fall another 8-10% if things turn worse, and Nifty may fall to 14000 in the worst-case, experts said (). Several analysts told TheSpuzz Online that investors must follow ‘wait and watch’ strategy and use this correction to look for buying opportunities from lower levels and build a long-term portfolio filled with quality stocks.
What should the investors do now?
“Markets are witnessing selling pressure as all the sectoral indices are trading in red. Markets are currently trading below their important moving averages and have breached their interim support levels today. Since we expect volatility to prevail in the near term, we advise investors to avoid fresh longs, said Likhita Chepa. Senior Research Analyst at CapitalVia Global Research.
Follow ‘wait and watch’ strategy
“It is advisable that all investors should follow ‘wait and watch’ strategy and avoid any fresh entry at the current juncture. Long term investors having an investment horizon of 3-5 years will get a good opportunity to avert their portfolio, once the global situation stabilizes,” said Ravi Singh, VP & Head of Research, Share India Securities.
Capital goods, infra, real estate, financials should be on investors’ radar
“Anecdotally, geopolitical issues provide a good buying opportunity for the long-term investors and we are in a structural bull run that is likely to continue for the next couple of years where intermediate corrections will be part of this journey. Long-term investors should not panic and look for buying opportunities from lower levels where the domestic economy facing sectors like capital goods, infrastructure, real estate, financials should be on investors’ radar, said Parth Nyati, Founder, Tradingo.
Don’t build new positions until situation gets better
“Markets have been trading below an important support level of 16750-16800 after the new developments on the Russia- Ukraine borders. The war on the borders have started and the situation is looking to get even worse. Although the next support level is around the level of 16400 but we would recommend the investors to not build any new positions until the situation gets better,” Gaurav Garg, Head of Research at CapitalVia Global Research
Pick up quality stocks
“It would be practically impossible to say when how much the markets will fall as they are guided by external factors and they tend to defy technicals during such times. Investors should keep exposing small portions of their investable capital to pick up quality stocks with each such opportunity,” said Milan Vaishnav, CMT, MSTA, Consulting Technical Analyst and founder, Gemstone Equity Research & Advisory Services.
Invest in sunrise sectors
“We reiterate our bullish stance on Indian equities for next three years. History has shown us that these wars offer good entry points for investors. Be it the wars of Vietnam, Gulf, Afghanistan, Iraq or the Crimean crisis, markets have fallen on war fear, then rallied when the actual battle broke out and further continued its upward journey post the war. The next 7-odd trading sessions will offer tremendous opportunity for the long-term investor. Invest in good quality management in sunrise sectors,” said Amar Ambani, Head of Institutional Equities, YES Securities
Hold growth stocks, let volatility pass
“Investors should continue to hold growth stocks and let volatility pass and could add stocks in staggered manner once market stabilizes,” said Narendra Solanki, Head- Equity Research (Fundamental), Anand Rathi Shares & Stock Brokers.
Add light positions only in quality stocks
“Markets world over have gone for a toss, post news of Russia moving into Ukraine, in a swift military action. India markets too have borne the brunt, with benchmark indices down by over 3%. Nifty 50 has crucial support around the 16400 mark, the low witnessed in December, which is very crucial. Declines outnumber Advances by over 10:1. India VIX trading above 32 levels, clearly reflects heightened fear in the markets. Investors are well advised to stay cautious, adding light positions only in quality stocks, till there is clarity on the unfolding scenario in the Russian-Ukraine conflict,” said Aamar De Singh, Head Advisory, Angel One Ltd.