Home / Markets / Stock Markets /  Buy on dips market only for long-term investors, say experts

MUMBAI: With the benchmark equity index Nifty50 down 6% or almost 1100 points in the past eight sessions amid a slew of negative global cues that point to an increasingly risk-off sentiment the biggest question for investors is how to navigate the volatility.

Volatility gauge India VIX, a measure of investor greed and fear, has surged 17% coinciding with the market fall. Three experts throw some light on the market scenario to help investors look for answers. The crucial make or break level for the Nifty is said to be 16640.

Jignesh Desai, co-founder, NJ India Invest

There has been a minor impact in SIP inflows but by and large they continue to be robust, says India’s largest MF distributor. SIP investors should continue their buying on dips if they are in for the long haul of 3-5 years. This is a buy-on-dips market for those in for the long term. A record 12693 crore was collected through SIP in August while SIP AUMs stood at 6.4 lakh crore in the fiscal year through August 2022. Save for this period of volatility, ambient economic conditions in India, a demand-driven economy, look good and earnings improvement is visible.

Rajesh Palviya, VP (research), Axis Securities

This is not a market for short-term investors, having three to six months horizon. Only long-term investors can use this volatility to their advantage by picking interest rate sensitives in the autos and BFSI space once we’re through with the MPC decision on repo rate on September 30. A key level to watch for is 16640 – the 50% retracement of the rise from June 17 low of 15183 through the high of 18096 on September 15. If this level breaks, the gates to the June low open. Until we stay above that level, we can move toward 18000 once the volatility subsides. Markets have priced in 50 bps hike by RBI. Likes Eicher Motors, Escorts, State Bank of India, Bank of Baroda and ICICI Bank.

Sudip Bandyopadhyay, chairman, Inditrade Capital

A buy-on-dips market for long-term investors. The BFSI space is good for buying on dips. With Brent oil below $90 a barrel and gold behaving, two of India’s largest imports, we see some silver linings in the dark clouds formed since the US Fed indicated an aggressive rate tightening cycle. The volatility will continue for a while and FIIs might scurry to the safety of US bonds, but domestic investors can lap up as they did in the falling market between the record high of 18604 in October 2021 to the 52-week low of 15183 in June 2022. Since then market rose almost 18% and FIIs turned net buyers in July and August. A similar thing can play out if the volatility persists. Top picks include SBI and ICICI.

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