Market experts sound note of caution on election euphoria
- "From here onwards focus will shift to priorities in public expenditure, and economic reforms,” said Sachin Relekar, CIO (Equities) at LIC Mutual Fund
- Some fund managers have advocated taking a long term view
Even as the Sensex rallied to touch the 40,000 mark, investment professionals and wealth managers have urged investors to be cautious even while recognizing benefits of a stable government. "Markets were looking for stability, continuity and strong leadership rather than a fractured mandate - this has led to the new high," said B Gopkumar, ED and CEO, Reliance Securities. However other experts sounded a more cautious note.“Valuation wise Nifty at 12,000 trades at around 19x on forward PE basis. Hence we see limited upside potential in the Nifty in the near future. Part of the passive money that has come by way of ETFs in the last three months could move out if Nifty goes above 12,000 level," said Rusmik Oza, Head of Fundamental Research, Kotak Securities Ltd. Experts noted that even on a trailing basis, the markets trade at relatively high valuations. “The Nifty trailing PE is close to 29 and this is not a cheap market. There is a trade war internationally between the US and China," said Ankur Maheshwari, CEO, Equirus Wealth. "The Nifty has risen from the recent lows of 11100 odd after the exit polls. To that extent a large part of the election results is already priced in." said Deepak Jasani, Head, Retail Research, HDFC Securities.
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