Difficult times but continue focusing on stocks and sectors, say HNI investors on poll verdict

While the fall has impacted investors across categories, high net worth individual (HNI) investors appear to be focused on their long-term investment strategy in the market irrespective of which party forms the government.

“That's so long ago, I don't remember.” This famous line was said by Humphrey Bogart in the 1942 Academy Award winning classic Casablanca when asked where he was a night ago.

For stock market investors, Tuesday represented a day when no one remembered what had happened just a day earlier on Monday – both the Sensex and Nifty had closed at all-time new record highs.

On Tuesday, the benchmark indices went in a freefall mode right from the word go as initial trends had started pouring in much before the markets opened. Thereafter, the indices remained extremely in the red throughout the trading session.

The 30-share Sensex, which was down more than 6,200 points or 8.15 percent during intra-day trades, settled at 72,079.05, down 4,389.73 points or 5.74 percent. The broader 50-share Nifty ended the day at 21,884.50, down 1,379.40 points or 5.93 percent.

While the fall has impacted investors across categories, high net worth individual (HNI) investors appear to be focused on their long-term investment strategy in the market irrespective of which party forms the government.

While they say it is difficult to predict if there will be further correction, they believe that the fall has given a good buying opportunity as valuation concerns were always there in the market.

“I don’t know how much more the market will correct but it is giving us an opportunity to buy. One can go for staggered buying as no one knows how much more the market will fall,” said Ashish Chugh, a Delhi-based HNI investor.

“There is always a recency bias in the market and it gets hugely impacted by the events that have happened in the immediate past. With the markets falling, I am just waiting to buy. if I want to buy a share at say Rs 50, now I am waiting for that to come down to Rs 40. Everyone wants to buy cheap and when you see so many stocks falling, you tend to wait,” added Chugh.

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On Tuesday, more than 3,400 stocks lost ground as against only 418 gainers. Further, 292 stocks touched their respective 52-week low level.

Meanwhile, well-known investor Vijay Kedia believes that the best strategy would be to focus on sectors that are high priority for the new government.

“My strategy will be to focus on the sectors that are high on the radar of the new government. We are in the market to make money and will continue to do so. Just that the strategy will have to be tweaked according to the new political setup,” he said.

Also Read: Q&A | Here is what market veteran Shankar Sharma said on sharp fall in equities & way forward

Another HNI investor, who did not wish to be named, said that while Tuesday’s movement was a surprise, there is no denying the fact that valuations are high and hence not much should be read into the fall.

“All that was required was a trigger and the election results provided that. One should look at fundamentally strong companies from a long-term perspective but it looks like the next 5-10 months would be difficult from a return on investments point of view. But now one needs to forget what happened today as the market will also start looking ahead for fresh triggers like cabinet formation and budget among other things,” he said.