‘Fall in stock market offers good buying opportunity’

Source: The Hitavada      Date: 08 Feb 2018 10:02:40


Business Buraeu,

The stock market indices -- Sensex and Nifty are witnessing a steep correction due to heavy sell off in equities which was very much anticipated and needed. With this, the steep fall in the stock markets offers a good opportunity to buy fundamentally sound scrips. After a continuous run up in share prices a correction in the stock markets is actually a sign of a healthy long-term bull run, said CA Sameer Bakre while talking to The Hitavada on Wednesday.

Bakre said that the investors should wait for some time till the markets stabilise and then enter at lower levels. Investors should not panic as there is ample liquidity in the markets. Domestic mutual funds and Life Insurance Corporation of India (LIC) have pumped in more than Rs 2.18 lakh crore during the calendar year 2017. He expects the Sensex to oscillate between 32,500 and 33,000 points for the next 15 days. The Union Budget had some surprises with the announcement of introducing 10 per cent Long Term Capital Gains (LTCG) and by not abolishing the Security Transaction Tax (STT) of 0.15 per cent which led to negative sentiments, erosion of share prices and heavy selling by Foreign Institutional Investors (FIIs).

He advised investors not to panic and sell their portfolio’s at lower levels to avoid LTCG which will come into force from April 1. He expects the Government to announce some measures to stabilise and boost the markets very soon. In the Budget, the Government has focused its attention on rural development and infrastructure.

He advised investors to look at sectors like pharma, agro based industries, FMCG, infrastructure, micro finance companies etc., which would have good future prospective.
Anuj Badjate, Director of Badjate Stock and Shares Private Limited said that the big fall in stock markets offers an opportunity to enter the stock markets at lower levels. He expects the Nifty to fall to about 10,200 points before it stabilises.

“As the micro and macro data starts to improve and international crude prices start to stabilise and stay below the $ 70 per barrel level, we could see the capital markets reach a new high within six months from March. The impact of GST has waned out and now the positive affects and rise in tax collection will start to trickle in,” he said.
He suggests that investors should invest in sectors like construction related companies, commercial vehicles, mining equipment, capital goods, banks and infrastructure to name a few.

CA Kailash Jogani said that investors should not shy away from the share markets as he feels that the recent crash in equities offers a bright opportunity to invest at beaten down levels. “India’s bull run is intack and the fundamentals are sound,” he said. There are a few major concerns which could affect the economy like rise in international oil prices, Federal Reserve raising interest rates resulting in flight of capital from India to US, higher inflation and widening fiscal deficit.

Jogani anticipates that the Nifty may oscillate between 9,800 and 10,800 points for some time before resuming its march forward. “In India there is no better invest option other than the share market,” he added. He suggested that investors should look at infrastructure, FMCG, cement etc., as long term investment options for more than one year.

CA Dr T S Rawal said that the fall in capital markets offers a beneficial opportunity to investors to buy strong fundamentally sound equities. He said that the markets had reacted badly to the announcement of bringing in LTCG. “Nowhere in the world there happens to be double taxation like STT and LTCG at the same time. More clarity is required in this matter,” he said.