Should you go long or short on Nifty over next 30 days?

NEW DELHI: As the benchmark indices have been volatile in the past few days, seasoned market analysts also find it hard to arrive at a consensus on what way the market will move in the short term.

However, balance is tilting towards the conviction that the market is more likely to fall in the next one month, but in the long run the bulls are more likely to thrive as far as Indian stock markets are concerned.

This was the conclusion of a panel discussion during ETMarkets Global Summit that featured names like Amrita Farmahan, CEO & MD of Ambit Wealth; Andrew Holland, CEO of Avendus Capital; Deepak Shenoy, Founder of Capital Mind and Manishi Raychaudhuri, MD-APAC at BNP Paribas.

Shenoy said there was more reward in going short on Nifty for one month. Holland agreed saying the reasonable answer is to go short, but said his strategy will be to go long as there will be too many people shorting the market. Farmahan also said she will be long on Nifty, while Raychaudhuri said balance is tilting in favor of going short despite the fact that it is going to be a crowded market.

Benchmark indices have seen an unprecedented rally. BSE Sensex has kissed the 50,000 mark, almost doubling since March when it hit a multi-year low. NSE Nifty has also followed in its footsteps and is trading at record high levels. Midcap and Smallcap indices have grown even more.

The rally has been supported by euphoric rise in pharma and IT sector as they emerged as the biggest beneficiaries of the pandemic and the consequent restrictions. But in the next one decade, some other sectors may take centerstage.

Holland said as India‘s economic growth rate gathers pace, banks and financials will emerge as the biggest beneficiaries and people should invest in them.

“Banking is going to be the basic industry if the economy is going to grow. I think the banking stocks are the sector to buy, and not just private ones. Millennials are going to have great spending power, so banking and other financial stocks like insurance, investment management will do good,” he said.

Raychaudhuri agreed with the veteran emerging markets investor but said he will focus just on private financial players in insurance, banks and other financial segments because of the growth potential and the ease with which they can raise capital.

Farmahan, along with Shenoy, on the other hand, is banking on new-age digital players for the next decade, many of which are likely to debut in the stock market in the next couple of years. She also said in the relatively short term, consumer discretionary sector will be interesting due to pent-up demand.

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