Tough times, but let’s continue to focus on stocks and sectors, say HNI investors after survey verdict

– It was so long ago that I don’t remember. This famous line was uttered by Humphrey Bogart in the 1942 Oscar-winning classic film “Casablanca” when asked where he was last night.

For stock market investors, Tuesday was a day when no one remembered what happened just a day earlier on Monday – both Sensex and Nifty closed at new record highs.

Benchmark indexes started falling early on Tuesday as initial trends began to emerge well before markets opened. Then the indices remained negative throughout the session.

The 30-share Sensex, which fell over 6,200 points or 8.15 percent on the day, settled at 72,079.05, down 4,389.73 points or 5.74 percent. The broader 50-share Nifty ended the day at 21,884.50, down 1,379.40 points or 5.93 per cent.

While the decline has affected investors across the board, high net worth individual investors (HNI) seem to be focusing on their long-term investment strategy in the market, irrespective of which party forms the government.

While they say it’s difficult to predict whether a further correction will occur, they believe the decline has created a good buying opportunity as there have always been valuation concerns in the market.

“I don’t know how much the market will correct, but it gives us a chance to buy. You can choose to buy over time as no one knows how much the market will fall,” said Ashish Chugh, a Delhi-based HNI investor.

“There is always a recency bias in the market, which is greatly influenced by events that have occurred in the immediate past. As the markets fall, I just wait to buy. if I want to buy a share at, say, Rs 50, now I wait for it to drop to Rs 40. Everyone wants to buy cheap, and when you see a lot of stocks going down, you tend to wait,” Chugh added.

Also read: Defensive FMCG, pharma, IT sectors may gain as investors remain on the sidelines after weak mandate for NDA

On Tuesday, more than 3,400 companies lost value compared to just 418 companies that gained. Additionally, 292 stocks hit a 52-week low.

Meanwhile, renowned investor Vijay Kedia believes that the best strategy would be to focus on sectors that are a high priority for the new government.

“My strategy will be to focus on sectors that are high on the new government’s radar. We are in the market to make money and we will continue to do so. However, the strategy will have to be adapted to the new political system,” he said.

Read also: Questions and answers | Here’s what market veteran Shankar Sharma had to say about the stock’s sharp decline and the future prospects

Another HNI investor, who did not wish to remain anonymous, said that while Tuesday’s move came as a surprise, there is no denying that valuations are high and therefore one should not read too much into the fall.

“All it took was an impulse and the election results ensured that. Fundamentally strong companies should be looked at from a long-term perspective, but it looks like the next 5-10 months will be difficult from an ROI standpoint. But now we have to forget about what happened today because the market will also start looking for new factors in the future, such as the formation of the government and the budget, among others,” he said.