Lok Sabha Elections 2019: How will Sensex, Nifty move post verdict? Know which stock to invest in, check sector-wise guide
Everyone will be eyeing post election market sentiments, movements and accordingly decide how they will invest.
After touching a new high of 40,124.96-mark, Sensex gave away the gains and finished at 38,811.39 down by 298.82 points or 0.76%. Similarly, the Nifty 50 dropped by 80.85 points or 0.69% ending at 11,657.05. The 50-scrip index had also touched an all-time high of 12,041.15 on Thursday’s early trading session. While stocks like IndusInd Bank, Coal India, Yes Bank, Hero Motocorp, Power Grid and ICICI Bank surged on exchanges, selling pressure in stocks like Vedanta, ITC, HDFC Bank, Tata Motors, Bajaj Finance and Sun Pharma weighed on the benchmarks. Also, the Indian Rupee finished at 36 paisa lower earmarking above 70.02 levels against the dollar at interbank forex market. The Lok Sabha 2019 election verdict went in favor of BJP, which bagged massive majority. Everyone will be eyeing post election market sentiments, movements and accordingly decide how they will invest. Here’s what you can do!
Why did markets decline on Thursday?
Mustafa Nadeem, CEO, Epic Research said, “Now, on the other hand, the Market has seen a new all-time high of 12041 but ended the day on the back of profit booking. This is what we have been indicating in the last few days. The volatility was very much expanded, derivatives were pointing to a range of 12100 - 11500. The tub-thumbing victory may need to be digested by markets. The profit booking and the loss market posted today is the end result of heightened volatility; which compressed from 29 to 19 today. Derivatives data pointed to a range bound action and that is what we have seen with Nifty not able to surpass 12100 while it may continue to take support around 11500. We have seen both calls and puts being hammered today amid declining volatility.
Where is market headed?
Amar Ambani, President and Head of Research, Yes Securities said, "The stock market likes certainty. The strength of this mandate for the BJP assures stability in government, stability in governance and continuation of the development agenda for the next five years. We saw the Sensex rise 900+ points intraday before retracing later in the day. In all likelihood, the market will remain euphoric in the coming days. Post that, the focus will shift back to corporate earnings, liquidity situation and global events. I am sanguine on the market move and reiterate my Nifty target of 13000 in 2019."
"The best outcome of this election may just be realisation by political parties that only developmental politics is the way to secure a strong mandate," says Ambani.
How should you invest?
Explaining how to invest on Dalal Street, Nadeem said, "So, if one has to keep the focus on where to move from here in terms of investments then know that there are many sectors that are performing well in the last few years with Financials, Pvt banks, banking Sector as a whole, Auto, Energy. The small Cap, Midcap has also shone in the last few years though lately crisis of liquidity crunch is haunting them."
Nadeem believes PMJAY, Bharat mala and the financial sector may continue to lead and further post good returns in the coming year. As these are game changers and massive and brings in a lot of investments that are in worth trillions. The benefits are to be seen in the coming years.
In the coming days, Nadeem says, "We believe there may be some sideways movement between 11450 - 11800. Though one should still utilize the dips for a potential short term upside to 11900. But its time to be aware that there is a selling pressure around 12000 and it is the third time we have not been able to hold above 11900."
Abhijeet Bajpai, Co-founder & CEO, Avighna Trades said, "Now the results are out it may not largely affect the markets as a whole. Investors and traders must wait for correction to enter in the market as going forward Sensex and Nifty may need to consolidate at lower levels. In general the market are expected to follow global market sentiments for next couple of days. Nifty and Sensex may correct about 5% in next few days. Investors must focus on quality Midcaps in Infra, financial and banking sectors in any correction in the markets.
Listing out stocks, Romesh Tiwari, Head of Research, CapitalAim said, “Looking at technicals, Nifty has support around 11,730 levels, breaching it on downside might result in more downside towards 11,600, On the upside, any close above 11,800 may take the Nifty above 12,000. Infra and Banking sector may give good returns on the upside. We are positive on DLF, Yes Bank, IndusInd Bank.”