Domestic equity markets are witnessing strong bouts of volatility at this juncture. After ending 2022 with nominal gains, there were hopes that the new year will turn out to be better. While the year has just begun, the start has been disappointing.
Equity benchmark Sensex is now 5 percent down from its all-time high of 63583.07 that it hit on December 1, 2022.
There is so much uncertainty now. Equity investors seek clarity on whether the market will fall more or if has discounted all the negatives. Is it time to buy the dips or wait for more corrections?
While the long-term prospects are still intact, the market will remain on a bumpy track in the short term.
MintGenie talked to analysts to understand what retail investors should do in this market. Here's what they said:
Mitul Shah, Head of Research at Reliance Securities
We expect the market to remain volatile over the near term amid expected subdued IT sector results over the next 10-15 days and pressure from global issues along with currency depreciation. However, we remain positive on long-term fundamentals and suggest buying on dips in quality companies. We continue to like the Financial sector and engineering sector.
Manish Chowdhury, Head of Research, STOXBOX
We expect markets to be rangebound, with a negative bias, primarily due to the ongoing global turmoil emanating from US, Europe and China.
Though India, on a standalone basis, looks good from a medium to long-term perspective, we advise investors to take a cautious and staggered approach to investing.
We feel that few pockets offer room for upside from the current levels, especially on the banking and FMCG sides.
Our top picks at the current juncture are SBI and Jyothy Labs. SBI should largely benefit from expanding NIMs and reducing stress on the asset book, while Jyothy Labs should stage a comeback on the back of easing cost side pressures and an expected pickup in volume growth.
S K Hozefa, Chief Executive Officer, Tradeplus
We do not expect more fall in the market. We do not see the global economy at imminent risk of sliding into recession in early 2023. The financial conditions drag is being cushioned by a fading of supply chain and commodity price shocks. The sharp drop in inflation is helping the world economy grow, so a recession is not likely to happen soon.
As a basic Investment rule, one should not lose the opportunities in a dip, but the question is what to buy. investors should pay close attention to value stocks instead of momentum stocks because they haven't been hurt as much by higher interest rates
While investing in the index and index funds is always a yes, one can carefully pick up large or midcap stocks which are probably at a desired low.
Sectors to look out for will include energy, healthcare and pharma, speciality chemicals, technology and manufacturing.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of MintGenie.