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Book profit? Depends on if you are looking at 5 days or 5 years

Do not focus on short-term trade, said Nilesh Shah, MD & CEO at Envision Capital.

, ETMarkets.com|
May 23, 2019, 12.33 PM IST
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The vibes on the macro-economic front are making investors wonder if they should use the peak point of the market to take some cash off the table.
NEW DELHI: The breakneck rally in stocks in response to early trends in vote count spun major wealth for investors, as the benchmark indices scaled record highs.

But the vibes on the macro-economic front are making investors wonder if they should use the peak point of the market to take some cash off the table.

Analysts said profit booking at this stage would depend on investor outlook. The next 18-24 months could be pretty good for domestic equities, and those with a long-term investment horizon will do well to hold their horses for now.

BSE benchmark Sensex has rallied 2,900 points, or 7.84 per cent, since it hit sub-3,7000 level on May 13. The sharp move in nine days pushed the index beyond the 39,900 mark. Nifty has climbed 6.4 per cent, or 713 points, to 11,838 from 11,125 level on May 13, 2018.

Do not focus on short-term trade, said Nilesh Shah, MD & CEO at Envision Capital. “There would be a lot of people who may want to book profit. But one must keep in mind that Nifty was at 7,200-7,5 00 when the NDA government won elections five years back. Today, it is almost at 12,000. Keep your eyes on what could potentially unfold over the next five years and not what would potentially unfold over the next five days,” Shah told ETNow.

At the time of writing of this report, trends/leads showed the BJP-led NDA ahead in over 340 seats against UPA’s 95 and others’ 82.

Earlier this week, the Times Now-VMR exit poll pegged 306 seats for the BJP and allies, well beyond the halfway mark of 272. Republic-CVoter projected the BJP-led NDA to win 287 seats, while News Nation’s exit poll gave NDA 223-290 seats.

“There is enough juice left. This verdict will give a clear direction to the market. A lot more longer-term participants would commit money if this result comes our in line with the exit poll verdict,” said Sunil Subramaniam, MD & CEO at Sundaram Mutual.

“If you see the market run from December 2014 to 2017, it was fabulous run. In 2017, there was this re-rating of global markets. Some issues took away a bit of the returns. But now, you will see that kind of rally again over next 18-24 months. The market will give the government a cushion, a free run for the next 18-24 months to continue with its programmes,” Subramaniam said.
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