What’s next for the Indian stock market after Election results 2019 ?
Despite the 2019 Election results in India, the stock market has not seen a big boost, but it is currently overvalued based on Market PE, what i had said earlier. As on Election results day, most of the Investors and traders have taken their profits. This is the first time on results day, the Indian stock market went down Since 1999.
During the Election result days, the sensex was up 6 percent in the year 1999, 0.77 percent in 2004 and in the year of 2009, it was 17 percent. During the leadership of PM Narendra Modi, the sensex rose 0.90 percent in 2014 Election results day. Prior to the past movements on Sensex and Nifty, it should be remembered that the Indian stock market was in crash or correction mode. But, now this time that the market was seen as overvalued before Election results.
Apart from the recent election results, there are other factors to impact the market in the near future like Global factors, Domestic numbers based on economy. The Market indices are currently trading at 28-30 points on Price to Earnings ratio (P/E). Although the Large cap sectors are already rallied, but the Mid and Small cap have not yet recovered from the death.
The Unemployment rate, Reserve Bank of India(RBI) Policy, Inflation rate, Bank NPA ratios are the key factors to move the market for the next few months. US-China Trade war, Iran Border tensions, Brexit and Automobile sales data are the next challenges for the Domestic market as well.
Fiscal deficit and Trade deficit is also the concern for the Emerging country, that we are expecting to go forward. It is also important to note that how the new government will react on Agricultural development.
As i said, currently the Nifty and Sensex is overvalued, one should find good stocks based on Fundamental Analysis and invest in a small on any correction. In the upcoming weeks, the market is likely to meet a small correction and an investor should focus on Value based stocks.
Kindly share your views / comments with a smile:)