Time for equity investors to partially book profits

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Time for equity investors to partially book profits
Even as the Sensex and the Nifty scale record highs on huge speculative interest after the exit polls, analysts are warning against over exuberance. Credit Suisse says exit polls out on Monday showing India's Bharatiya Janata Party and its allies headed for a majority still reveal a "range of high uncertainty."

Several market participants are now warning against over exuberance.

With the Sensex rallying a staggering 1500 points in three trading sessions it's time investors book profits and wait for the outcome of the election results.

Remember, the markets are factoring a virtual majority for the NDA and any number significantly short of this could be a disaster for the markets.

Apart from this analysts also point to how investors have completely discounted the weak data that came on Monday, especially the lower factory output and high inflation data.

CPI inflation continues to remain elevated which would put pressure on the next government and the RBI to push inflation rates lower. This means interest rates would continue to remain high.

Even if the NDA were to get a majority growth is likely to take place with a lag and that could easily be one year from now. No individual has a magic wand to push growth rates higher or eliminate corruption overnight.

All in all, it maybe time for investors to at least partially book profits and sit on cash. Maybe you could get stocks much lower a few weeks from now. Riding the wave has always proved disastrous for small investors and some still have to recover their huge losses made in 2008.


Story first published: Wednesday, May 14, 2014, 8:58 [IST]
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