The Hindu Business Line : ‘Political instability has not changed our investment model’

In spite of political instability injecting bearishness in the stock markets, it could be the right time for players to get into long-term positions. Though history shows that markets have never reacted positively to news involving the left wing, market watchers are optimistic that the current scenario presents investment opportunities in robust frontline stocks.

“The markets have been at the receiving end as they have failed to discount the current political turmoil. The possibility of the Government falling is looming over the bourses. However, these kinds of situations bring stocks at a discount and so it should be taken as a cue to enter heavyweights at a cheap valuation,” said Mr V.K Sharma, Head Of Research, Anagram Stockbroking.

Marketmen are drawing solace from the fact that fundamentally, the growth story is still intact.

This is a period of correction which presents good opportunities to invest; in the past markets have made up and reacting negatively to political instability, according to Mr Anup Maheshwari, Head-Equities & Corporate Strategy, DSP Merrill Lynch.

Though FIIs have been net sellers for the entire month of August, it has not propelled them to re-engineer their India strategy. “The political instability has not changed our investment model. We will continue with our ongoing strategies and plans for the future” said Mr Rajen Doshi, Country Head, India, Nikko am.

However, the falling markets have reduced the risk appetite of the average investor, which is a matter of concern.

Though analysts are advising their clients to stay put, the nervousness and uncertainty prevailing demand that the stocks that are speculative in nature should be avoided. “ This might not be the best time for bargain hunting,” adds Mr Arun Kejriwal, Director Of Research & Information Services

According to market participants, eventually market will be influenced by global trends relative to domestic political issues, because politics don’t change things fundamentally.

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