He also touches upon what investing strategies should traders as well as long-term investors follow?
In the first episode of In Focus, Udayan Mukherjee, Consulting Editor, CNBC-TV18, delves on market trends and investing strategies amid the Indo-Pak tension.
He also touches upon the strategies investors and traders should follow.
Investors should not panic and sell off stocks, says Mukherjee. At the same time, it would be prudent to have a defensive portfolio because there is no telling where this escalation could lead to. As for traders, they should look at the volatility as a opportunity in midcaps and smallcaps, he says.
According to Mukherjee, the market's assessment is that the escalation of tension between India and Pakistan can get people behind the leader of the nation and therefore PM Narendra Modi's chances of doing well in the coming elections have increased. But if one looks at history, there have been enough instances where governments have lost power even after armed conflicts, he cautions.
"While one may choose to play this rally, it pays to keep history in mind and not jump to conclusions," says MukherjeeHe also answers the key query of whether the current mood can be capitalised for a trading rally and does the picture change if escalations were to rise.