The Indian stock market witnessed a sharp fall on Tuesday, with both the Nifty and Sensex trading close to 5% lower. This steep decline came a day after both benchmark indices had reached new highs following exit polls that predicted a significant victory for the incumbent Prime Minister Narendra Modi-led party. Market veterans such as Samir Arora and Nilesh Shah have cautioned against knee-jerk reactions to this unexpected drop.
Arora, the founder of Helios Capital, expressed his surprise at the sudden decline, attributing it partially to the significant increase in stock prices the day before. He mentioned that the current fear gripping the market seems unwarranted based on existing economic fundamentals. Arora highlighted that while certain companies might be impacted, the widespread market decline cannot solely be attributed to the election results, especially since the final outcome is still pending.
On the other hand, Shah from Kotak Mahindra AMC advised investors to remain patient during this period of volatility. He emphasized the importance of waiting for more data to become available before making any significant investment decisions. Shah suggested that this could be an opportune time for traders to take advantage of the market fluctuations, while investors should focus on identifying potential opportunities and making informed decisions based on valuations.
Moreover, Shah provided insights into bond yields, recommending a medium-term view for locking in duration. He highlighted the current opportunity to secure higher yields in fixed income investments amidst the market turbulence. While acknowledging the uncertainty surrounding the market, both Arora and Shah advised against making hasty decisions in response to the recent events.
As the market continues to display heightened volatility, experts like Arora and Shah advocate for a cautious approach. They encourage investors to stay vigilant, analyze the available data, and make informed decisions rather than succumbing to market panic. By exercising patience and diligence, individuals can navigate the current market conditions with greater confidence and strategic foresight.