US Federal reserve chairman Ben Bernanke's surprise move to infuse more liquidity on Friday has sent markets across the world soaring. On Friday, US stocks clocked their first upmove in 7 sessions, and today, markets across Asia, including India, got off to a solid session. Despite some pressure from profit booking, indices managed to hold on to most of their early gains. The Nifty had gained nearly 150 points in early trade, but closed 101 points higher at 4,209. The Sensex, which had surged over 500 points in early trade, finally closed 286 points higher at 14,427.
Shashank Khade of Kotak Securities has a view that the semblance between fundamentals and valuations was completely lost during the midday crash, which was seen on Friday. "One doesn't really know how the political equations will unfold. But ofcourse the initial indications were the pulling down of the government and nobody wants elections right away. That clearly gives a sense that this government would last further for sure" he feels.
He adds that this political upheaval would be something for investors to wait and watch. Therefore, this sort of corrections and the bounce back will not be swift to a large extent as people would want to take time for the markets to get back their semblance to a large extent. "So one-day rise in the US markets or for that matter the Asian markets doesn't really change perspective to a large extent. I think we have had a straight run for last 3-4 months. The Indian market correcting in this month was something, which was due for sometime. In fact from 20th to 27th of July was when we had really hit most of the highs for our stocks for the large cap stocks. It has been 20 days since we have been in a correction mode" he adds.
Experts think that the market is giving good opportunities to buy at every dip. as some of the stocks have fallen by 5-10%. That gives us a good opportunity to enter the market and use this entire volatility as an opportunity. Therefore experts are not really concerned if the market could fall by another 3-5% further from these levels.
However, there are some concerns regarding the Left's support to the Indo-US nuclear deal and reports that it might withdraw support to the UPA government. So, will investors use this rally to lighten or exit positions?
Prasun Gajri, Senior Vice-President and Head-Investments, Tata AIG, said the political turmoil would cause short-term uncertainty in the market. "It will cause short-term uncertainty in the market and we could see some losses. When the poll results came out last time, the markets went down purely because the markets did not like the combination of the government. Eventually, the markets recovered after that brief period. If we see mid-term polls, what's the worse that can happen? I don't think the government in broad can change any policies, which drive the market today. I am not too concerned about any mid-term polls. Yes, they will cause some volatility but if you are a long-term investor, one has to look at that as an opportunity rather than as problem area for the moment," he added.
Shashank Khade of Kotak Securities has a view that the semblance between fundamentals and valuations was completely lost during the midday crash, which was seen on Friday. "One doesn't really know how the political equations will unfold. But ofcourse the initial indications were the pulling down of the government and nobody wants elections right away. That clearly gives a sense that this government would last further for sure" he feels.
He adds that this political upheaval would be something for investors to wait and watch. Therefore, this sort of corrections and the bounce back will not be swift to a large extent as people would want to take time for the markets to get back their semblance to a large extent. "So one-day rise in the US markets or for that matter the Asian markets doesn't really change perspective to a large extent. I think we have had a straight run for last 3-4 months. The Indian market correcting in this month was something, which was due for sometime. In fact from 20th to 27th of July was when we had really hit most of the highs for our stocks for the large cap stocks. It has been 20 days since we have been in a correction mode" he adds.
Experts think that the market is giving good opportunities to buy at every dip. as some of the stocks have fallen by 5-10%. That gives us a good opportunity to enter the market and use this entire volatility as an opportunity. Therefore experts are not really concerned if the market could fall by another 3-5% further from these levels.
However, there are some concerns regarding the Left's support to the Indo-US nuclear deal and reports that it might withdraw support to the UPA government. So, will investors use this rally to lighten or exit positions?
Prasun Gajri, Senior Vice-President and Head-Investments, Tata AIG, said the political turmoil would cause short-term uncertainty in the market. "It will cause short-term uncertainty in the market and we could see some losses. When the poll results came out last time, the markets went down purely because the markets did not like the combination of the government. Eventually, the markets recovered after that brief period. If we see mid-term polls, what's the worse that can happen? I don't think the government in broad can change any policies, which drive the market today. I am not too concerned about any mid-term polls. Yes, they will cause some volatility but if you are a long-term investor, one has to look at that as an opportunity rather than as problem area for the moment," he added.
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