With the government embarking on big-ticket reforms, the markets have reacted positively and gained nearly 7% in the last one month and is eyeing the 20,000 mark.
The retail investor is faced with the vexing question: is this the time to buy, or to exit while the going is good?
Nirav Joshi, 30, an investor in the stock market, explained his predicament: “Due to past experiences one wonders whether it’s just euphoria or if markets would continue on the growth course.”
Analysts predict that this time round, the rally is likely to continue for some time, though the capital markets may see minor turbulence.
“We expect that the Sensex could be between 20,500 points to 21,000 points by end of the financial year,” said Rikesh Parekh, vice president (equities), Motilal Oswal Securities. “A lot would depend on how the numbers (growth, IIP) turn up by December.”
“There could be minor corrections in-between, like on Friday. This is the time for retail investors to buy stocks,” said Parekh. “Some sectors we expect to give good returns are pharma, banking and infrastructure.”
The government first allowed FDI in retail and aviation, and then in pension funds while increased their investment limits in the insurance sector.
Analysts say retail investors should buy in small proportions in different sectors spread across different companies in the current scenario. Investors looking to enter the capital markets should enter only on a day when the markets make a correction, and not when the markets are moving up.
“Keep a long-term view for investments,” advised Sunil Jain, vice president, equity research, Nirmal Bang.