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Do not sell in this market

Don’t sell now; stay invested. That’s the advice coming from market experts and financial planners as the Sensex plunged again, reports Sandeep Singh.
Hindustan Times | By Sandeep Singh, New Delhi
UPDATED ON JUL 01, 2008 11:14 PM IST

Don’t sell now; stay invested. That’s the advice coming from market experts and financial planners as the Sensex plunged again on Tuesday, eroding gains booked since April 2007 when the benchmark index was trading at 12,000.

A loss is not a loss till it is booked. If there is nothing wrong with the company invested in, investors should stay with it.

“This is not a market to sell. Unless it is extreme emergency don’t sell,” said Amar Pandit, a Mumbai based financial planner.

Experts believe, the market won’t go down much from here. “I don’t think it will fall below 12,000,” said Nirmal Jain, CEO, India Infoline.

Pankaj Pandey, head of research, ICICIdirect, said "there is still some weakness left, but the market should stabilize at around 12,000.”

Over the past six months, the Sensex has lost 38 per cent and all equity-linked investments have seen returns wearing down either in line or even more.

That said, Indian stocks have become attractive buys with the Sensex trading at a price earnings multiple of 15.9 now. The last time it traded below this was in November 2005.

“The EPS for 2008-09 is expected at Rs 1,000 and at a price earnings multiple of 15 the market (Sensex) should at least be at 15,000,” said Sudip Bandyopadhyay, CEO, Reliance Money.

If there are still no buyers, it's because the mood is gloomy, said Jain at India Infoline. What the market needs is a bout of good news and any softening of global oil prices could do the trick.

What should investors do?

Bandopadhyay thinks it's good time to go for value picks; Jain sayd invetors should wait for good news to come by and boost the market before they go for fresh allocations.

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