Should investors buy on dips or sit on cash after todays unexpected losses on election results day?
As the market showed disappointment over the NDA not securing a majority in the election outcome today, investors may be navigating as to how they should tread ahead. So, while on school of thought promotes the idea of buy on dips, the other supports sitting on cash as the best strategy currently.
Even as the markets have recovered from the day's low and investors are still awaiting the final Lok Sabha elections 2024 outcome, there is apprehension and immense nervousness among investors as to what direction they should take to amid the unprecedented fall which the markets have witnessed today.
As we write, NDA leads in 297 seats, INDIA is ahead in 228 seats while other parties have bagged 18 seats.
Sensex nosedived 6000 points while Nifty tanked by 1900 points today looking at the ongoing trend of election results where the NDA alliance is falling shorter from both exit poll as well as previous election results in 2019, noted Shreya Hanchate, Research Analyst, Bonanza Portfolio. The fall is thoroughly triggered by profit booking on high levels by investors post yesterday's record highs, and ambiguity due to results falling short on the exit polls. The sentiment may revive after some consolidation in the market and the negativity is not expected to remain for a long time, she added.
Amid such a backdrop, here's how experts recommend investors to tread the markets currently
Ambareesh Baliga,Independent market analyst held that investors can buy on dips currently but in small quantities. This is as he sees the correction to be continuing but with no major drawdowns like this any further. The expert primarily likes FMCG and IT sectors as a 'buy on dip' opportunity.
Echoing a similar view, Atul Parakh, CEO of Bigul suggested to remain invested and buy on dips should be the strategy. Investors should follow a long-term India story, and we have a decade ahead of India. The corporate earnings are good and growing we have potential of 12-13% growth and average corporate earnings of 15%, he added.
On the contrary, Chokkalingam G - Founder - Equinomics Research believes that investors can wait for a couple of days to understand final outcome on government formation and then start investing. Till then our research strategy is to sit on cash, he added.
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