Sensex breaches 75,000 level; is it time to be cautious? Check experts views
Dr. V K Vijayakumar added that the robustness of the Indian economy, the sustained capital flows into mutual funds, and the enthusiasm of domestic investors can support the rally.
The Indian benchmark indices made history in Tuesday's trade (April 9, 2024) as the S&P BSE Sensex crossed the 75,000 mark for the first time. The 30-scrip index had breached the 70,000 level on December 14. Since then, as per Zee Business research, Sensex has given returns of 6 per cent.
Reasons for the rally, as per market experts:
>> Bullish US markets;
>>Fundamentally strong sectors like capital goods, automobiles, banking, and metals;
>> Robustness of the Indian economy;
>> Sustained capital flows into mutual funds;
>> Enthusiasm of domestic investors;
>> Central banks around the world implemented interest rate cuts;
>> Promising future fueled by political stability.
"The hallmark of a bull market is its ability to set new record highs. This has been happening in the US market and also in the Indian market. An important feature of the recent rally in India is that it is led by fundamentally strong sectors like capital goods, automobiles, banking, and metals," said Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
Dr. V K Vijayakumar added that the robustness of the Indian economy, the sustained capital flows into mutual funds, and the enthusiasm of domestic investors can support the rally.
While touching on the topic of broader markets, Dr. V K Vijayakumar said valuations of the small-cap segment are elevated and unjustified.
Outlook on Sensex
Santosh Meena, Head of Research at Swastika Investmart Ltd believes that the bull run may persist for the next few years until the Sensex reaches the 100,000 mark.
"We appear to be in the midst of a major bull market, which is likely to persist for the next few years. The Sensex reaching 100,000 seems like a realistic possibility soon," said Meena.
Conversely, Aditya Goela, CFA, expects a correction in the near term, especially as the market's advance has been rapid. Additionally, as per him, Sensex will move sideways and then experience a decline following the election.
What should investors do?
As per Meena, investors should prioritise quality stocks while maintaining a long-term investment approach.
Aditya Goela, CFA, suggests investors adopt a cautious yet optimistic approach.
Goela's key strategies include:
>>Assessing market valuations to avoid overvalued stocks;
>>Diversifying across sectors;
>>Rebalancing portfolios to maintain desired asset allocations;
>> Focusing on quality stocks with strong fundamentals.
>> Aligning investments with long-term trends;
>> Maintaining liquidity to capitalise on market corrections;
>> Continuing systematic investment plans.
For Goel Infrastructure, PSB's, Defense and Renewable Energy sector look favourable.
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