Is the worst over for Stock Markets?
For the last few weeks, stock markets are exhibiting extreme volatility and weakness mainly on account of the European credit crisis starting with Greece and spreading fast to other countries.
Our Indian market is also responding wildly to those global sentiments and recorded a substantial dip in the last few weeks.
However, as far as India is concerned, this is mostly sentimental crash rather than the one based on economic or fundamental weakness.
Conditions such as these create panic in the minds of general investors who have less patience to see the big long term picture or low-risk tolerance.
But at the same time, these conditions also create opportunities for wise investors who can enter or accumulate good large-cap stocks and hold them for long term at attractive valuations.
Let us see what some of the market gurus have to say about the prospects of long term investments in Indian Markets.
KN Sivasubramanian, Head-Equity Portfolio, Franklin Templeton
The recent volatility is an indication that the global economy has not fully healed from the crisis of 2008 and investors are wary of systemic risks.
India is unlikely to be impacted by the sovereign debt crisis in Europe.
A Balasubramanian, CEO, Birla SunLife Mutual Fund
The behaviour of FIIs in May in the past many years has been difficult to predict.
We expect June to be a better month for the stock market, as the current fall is a good entry point for investors, given that fundamentals are stronger and fiscal health is better.
Vikram Kotak, CIO, Birla Sun Life Insurance
I think the market is overreacting to European worries.
We don’t expect any significant downside from these levels.
There is little doubt that the economy will see good growth for the next few years, driven by strong domestic consumption.
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