Profit-booking halted the euphoric upward move on the stock markets and key benchmark indices snapped a three-session of over 1500 points (Sensex) pre-election result rally on Wednesday to close at lower levels.
The S&P BSE Sensex closed at 23815.12, down 56 points after hitting an intra-day high of 23965. The 50-share NSE Nifty closed flat at 7108.75 after hitting an intra-day high of 7140.
“The markets opened higher tracking global cues and sustained optimism by investors. But profit-booking was seen as the short-term indicators were in the overbought zone,” said Alex Mathews, Head Research, Geojit BNP Paribas Financial Services.
“The PSU banking stocks were seen in demand. Foreign institutional investors are net buyers, bought shares worth Rs.2,026.23 crore in the capital market segment on Tuesday. On the other hand, domestic institutional investors were net sellers to the tune of Rs.649.42 crore as per provisional data from the stock exchanges,” Mr. Mathews said.
“The markets traded in a flat range with low volumes. There was a consolidation around Tuesday’s closing price for Nifty and the Sensex. Markets seem to be waiting for May 16 to confirm exit poll results before making a further move.
Among other indices, CNX Realty was the top gainer with 4.22 per cent, while CNX energy declined by -0.73 per cent,” said Kiran Kumar Kavikondala, Director & CEO, WealthRays Securities.
Experts have advised people to stay invested if they firmly believe in a strong decisive government.
“One should stay invested. In the past five years, the stock markets have not given much return. So now if NDA with absolute majority takes charge, it will be a big positive for the markets. Markets will be re-rated and going forward people can get good return on their investments if they stay invested,” said Ramanathan K., Chief Investment Officer, ING Investment Management.
“If you firmly believe in a majority government stay invested and you should hold on to your entire portfolio. If you are not sure, then liquidate 25 per cent to 50 per cent of your holding and utilise the cash later when the picture gets clear,” said Mr. Alex Mathews.
