Volatile markets: Experts advise investors to trade with caution

As Indian stock markets plunged more than 3% on Tuesday amid falling global crude oil prices and worries over Greece, financial advisers had a word of caution: make informed and well-researched decisions before shuffling around the savings portfolio.

As Indian stock markets plunged more than 3% on Tuesday amid falling global crude oil prices and worries over Greece, financial advisers had a word of caution: make informed and well-researched decisions before shuffling around the savings portfolio.

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The broad guidance was that people should use this opportunity to buy into value stocks, as Tuesday’s fall and subsequent corrections may not be due to local factors.

Dipen Shah, senior vice-president, research, Kotak Securities said nothing has changed dramatically within India, despite the fall. “Stock-specific approach should be taken. We are positive on a few stocks that are infrastructure-oriented and export-oriented, especially of companies that export to the US,” he told HT.

“This is the perfect time to buy for retail investors,” said Gaurang Shah, vice-president at Geojit BNP Paribas Financial Services.

“Such a fall is mostly a concern for intra-day traders. The forthcoming earnings season will be a trend-setter. As far as global factors are concerned, unless the eurozone does something, the situation will continue to be the same,” he added.

The Sensex saw the steepest fall in nearly six years as negative global cues over falling crude prices and Greece’s political situation prompted a sell-off, leading to a 3% correction. The 30-share index fell 855 points to close at 26,987.46, while the Nifty also corrected by 3%, losing about 251 points to close at 8,127.35.

ONGC emerged the top loser among Sensex stocks, falling 5.7%, as it bore the brunt of global sentiment over falling crude prices. SSLT (down 5.09%), Tata Steel (down 4.88%), HDFC (down 4.69%), and Reliance (down 4.67%), were the other major losers. Hindustan Unilever was the only Sensex scrip that ended the day with gains.

The oil and gas sector lost over 4% and the banking, capital goods, power, and consumer durables sectors fell by over 3% each. The mid-cap and small-cap indices lost 2.95% each.

“We will be seeing short-term corrections, however, this is the right opportunity to get into markets,” said Rahul Shah, vice-president, Motilal Oswal Securities.