Market sentiment in India continues to be weak at present, but experts are hopeful that it will bounce back next year.
Speaking at an investors' meet organised by the Hindu Business Line here, the experts advised investors to buy large-cap stocks now as a long term investment.
Mr Hitesh Agrawal, Head, Equity Research, Reliance Securities Ltd, set the tone for the meeting, stating that 2012 will be a year of interest rate cuts. “And with cut in rates, India's GDP will rise as consumer spending increases,” he pointed out.
He said history has shown that whenever markets have plunged , the bounce back was stronger. He, however, agreed that external factors such as the euro zone debt crisis and a weakening rupee were a matter of concern. “Investing during bad times has always proved to be good. The simple mantra is buy in bad times and sell during good times,” he pointed out
“With a forex reserve of $270 billion, we have no strength to support the rupee and all that the RBI can do is manage the volatility,” according to Mr Agrawal.
On the FDI front, he struck a positive note, stating that FDI inflows were to the tune of $22.5 billion between January and September this year, up 40 per cent from the corresponding period last year. He expected the inflows to touch $35 billion by the end of this fiscal.
He also felt that the rate of food inflation was showing signs of moderation and was likely to come down further if monsoons were normal.
Echoing similar sentiments, Mr Shiva Prasad, Regional Manager of Central Depository Services Ltd, also advised investors not to stop buying. “There could be problems in the short term, but in the long run, investment in equity is good,” he pointed out.
Mr Brajesh Thakur, Regional Head, Reliance Securities Ltd, listed out the different products of the company. He said its equity broking business touched a daily turnover of Rs 2,200 crore, while commodity broking clocked a daily turnover of Rs 250 crore, with a one per cent market share.