Mumbai: Half the respondents in a poll of market experts said they would advise investors to stay in cash ahead of the declaration of the general election results on Saturday.
About 25% of the experts polled by CNBC-TV18 favoured going short, 13% preferred going long and 12% said they would book profits at current levels.
Going short is the practice of selling a stock that the seller does not own, with the intent of purchasing it back at a lower price. Short-sellers essentially bet that a stock price would decline. Going long is the purchase of a stock in the expectation that it would rise in value.
The message from the markets, on the eve of the fifth and final phase of voting on Wednesday, clearly seems to be that it’s best to stay away or go short because an unfavourable election outcome could lead to a sharp correction in stock prices. Most experts say some form of coalition would emerge at the Centre from the elections, but the level of uncertainty remains high, resulting in huge market volatility. Political experts have predicted a fractured mandate with no political formation emerging a clear winner.
Among individual sectors, metals and realty have been in the limelight recently. For metals, about 36% respondents said they would sell now and 54% said they would hold or avoid taking new positions. Only 9% said they would buy metals. The view on realty is more bullish, as 50% of the respondents said they would buy realty stocks, while 25% said they would sell at current levels. The balance would either hold or avoid taking new positions.