Powered by the 2,111 point political enthusiasm, which saw the Sensex rise 17.3 per cent — the highest ever single-day surge — to close at an eight-month high of 14,284 on Monday, the one question bothering small investors returned to haunt them: have I missed the rally, that has driven the Sensex up 75 per cent since March 9, again?
In a market where there were only buyers and no sellers on the first trading day after the election results were declared, small investors may look for a long-term healthy return if global factors do not pose negative surprises and the foreign institutional investors maintain a healthy view on the Indian market.
“Retail investors should continue to invest regularly for the long term returns and not look for short term gains,” said Sundeep Sikka, chief executive officer, Reliance Capital AMC.
Entry with a short-term view should be avoided as many players feel there is not much of an upside from here in the short-term. “While this level looks sustainable for the time being, the upside is limited from here unless FII flows continue to remain strong,” said CJ George, managing director, Geojit BNP Paribas Financial Services.
The clear mandate to the UPA, and the absence of the Left, have convinced the market about the return of reforms.
“There is definitely a case for a long term bullish market in place and the retail investors should invest or continue with their investment with a longer term horizon,” said Gajendra Nagpal, CEO, Unicon Investment Solutions.
Market participants are of the view that Monday’s rally that saw the circuit (see story below) being hit twice during the day reflects the exuberant mood of the day. But experts also advised caution.
“We will have to see the impact of policy measures on the fundamentals and also we can’t ignore the performance of the global markets over the next few months,” said Sanjay Sinha, CEO, DBS Cholamandalam AMC.