New Delhi: After Tuesday’s mayhem on Dalal Street, stock market experts have advised investors to focus on consumption stocks for long-term investing. “This is the end of the exuberance in markets. Instead of chasing the momentum, now markets will chase earnings, valuation, good corporate governance and the defence sector,” said Ashish Bahety, NAV Investment Research, Technical and Derivative Analyst. This comes after all sectors except FMCG closed in red. Swiss brokerage UBS said it remained underweight on the Indian stock market citing its overvaluation.
Sectors in focus
Bahety went on to add that investors should exercise caution when choosing which stocks to buy. He suggested that investors can look at the following sectors for their portfolio picks:
FMCG
Pharma
Private Banks
IT
Kishore Ostwal, CMD at CNI Research, said: “Domestic consumption stocks should be on the radar since government may divert some funds from defence to social sectors.” Tuesday’s bloodbath has made markets relatively cheaper, he said, adding that “Nifty has reached pre-March 2020 levels, hence attractive for buying.”
Sectoral rotation in investments
Stock market research analyst, Saurabh Jain has also said that looking at the outcome of the Lok Sabha 2024 polls, he expects fund mobilisation in the market to move from sectors such as defence and infrastructure to FMCG and pharma. He expects sectoral rotation in investments as far as India’s equities are concerned.
Moreover, the government is likely to refocus spending on socio-economic lines, according to Vinod Nair, Head of Research at Geojit Financial Services. “The unexpected election outcome is likely to lead to a major shift in political policy with a focus on social economics, which will have a positive effect on the rural economy.”
Indian indices witness steepest fall in 4 years
The BSE Sensex and NSE Nifty witnessed the biggest single-day fall in the last four years on Tuesday. Both the benchmark indices fell nearly 6 per cent as vote counting trends showed the BJP may not have a clear majority in the Lok Sabha polls. Reversing Monday’s sharp gains of over 3 per cent, the 30-share BSE Sensex nosedived by over 4,000 points to close below 72,100. The NSE Nifty lost over 1,300 points to close 21,900 levels on Tuesday.
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Stock market experts believe the NSE Nifty and the BSE Sensex will see sectoral rotation in investments from defence and infrastructure into FMCG and pharma stocks. Markets Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
