Nifty at historic high, Sensex up 1,200 pts; Investment strategies to consider

The domestic equity market recently reached record highs following the BJP's impressive victory in three out of five state elections. The positive outcome has instilled confidence in investors regarding the continuity of the incumbent government in the upcoming Lok Sabha polls. Factors such as increased foreign investor inflows, a decline in US bond yields, robust GDP growth, and expectations of no further rate hikes have contributed to these market gains.

Both the Nifty and Sensex achieved new highs, with the Nifty reaching 20,602.50 points and the Sensex hitting 68,587.82 points. The mid and small-cap indices also recorded fresh peaks during the session. Some market analysts suggest that the upward momentum is likely to continue until the run-up to the general elections in 2024, with the Nifty potentially reaching 22,000 in the next four to five months.

However, experts caution that occasional profit booking may occur, considering the recent rally. Market sentiment is expected to strengthen further, and there is a strong possibility of a pre-election rally. Valuations, which are already high, may become a restraining factor, leading to some selling in the near term.

Here are some insights and investment strategies provided by experts:

Manish Goel, Founder & Director of Research & Ranking:

Retail investors should remain vigilant, stay informed, and adopt a long-term investment approach.

India's long-term story is unfolding, and despite market fluctuations, there are rewarding opportunities with the right advice.

Mukesh Kochar, National Head of Wealth, AUM Capital:

Investable liquidity in the market is significant, supporting the Nifty's new high.

Focus on asset allocation and portfolio rebalancing; quarterly results and strong GDP data indicate a robust economy.

Anirudh Garg, Partner and Head of Research at Invasset PMS:

The bullish trend ahead of national elections suggests investor preference for incumbent stability.

Political stability is crucial for fostering a conducive environment for market growth and investor strategy.

Apurva Sheth, Head of Market Perspectives & Research, SAMCO Securities:

Geopolitical risks and rising US bond yields are concerns; consider limiting equity exposure.

Increase exposure to gold and long-tenure debt as Lok Sabha Elections approach; favor stocks in auto, banking, and capital goods sectors.

Vinit Bolinjkar, Head of Research, Ventura Securities:

Bullish on infrastructure, pharma, consumption, engineering, and PSU banks; these sectors are expected to outperform.

Manish Jain, Fund Manager, Coffee Can PMS, Ambit Asset Management:

Maintain weight on banks, increased positions in auto & IT, and constructive on chemicals.

Negligible cash position.

It's important to note that these views and recommendations are from individual analysts or broking companies, and investors are advised to consult certified experts before making any investment decisions.