Stocks in Freefall: Is Now the Time to Buy? Expert Madhusudan Kela Weighs In
Market fluctuations can offer lucrative entry points for investors, according to veteran market expert Madhusudan Kela. Despite recent volatility, Kela expressed optimism about the opportunities that market dips can present, urging investors to adopt a selective approach in their stock picking.
New Delhi: Market fluctuations can offer lucrative entry points for investors, according to veteran market expert Madhusudan Kela. Despite recent volatility, Kela expressed optimism about the opportunities that market dips can present, urging investors to adopt a selective approach in their stock picking.
In a recent media interaction, Kela emphasized the importance of a bottom-up strategy for identifying strong stocks. He cautioned that the days of high returns seen in recent years may not be replicated, and investors should be prepared for more moderate returns going forward.
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Market Decline Following Union Budget and Trade Tariffs
The market experienced a decline in the first trading session following the Union Budget presentation, compounded by concerns over US President Donald Trump’s trade tariffs, set to take effect on Tuesday. The Sensex dropped by 327.25 points, or 0.42%, to trade at 77,178 during intra-day trading. Similarly, the NSE Nifty fell by 138.05 points, or 0.59%, to trade at 23,344.1.
Sectors such as metals, mid and small-cap IT and telecom, and real estate experienced the largest losses, while the Nifty 50 index saw a decline of 11% from its peak in late September, driven by multiple factors, including concerns surrounding Trump’s trade policies.
Focus on Large-Cap Stocks and Risk-Reward Strategy
Kela, known for his risk-reward approach to investing, currently sees more value in large-cap stocks. He noted that the Nifty index is trading at 18 times its estimated earnings for the next year, aligning with its long-term average. This presents an opportunity for investors to focus on stable, larger companies that may offer better security in uncertain times.
Consumer stocks, particularly regional brands in the staples segment, are gaining market share from larger competitors, Kela added, highlighting these as potential areas for investment.
PSU Stocks: A Cautious Outlook
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Reflecting on his earlier positive outlook for public sector undertakings (PSUs), Kela acknowledged that some PSU banks continue to offer investment potential. However, he advised investors to have realistic return expectations and exercise caution when evaluating such stocks in the current market environment.
Investment Strategy in a Volatile Market
Kela urged investors to be cautious with the gains from the past few years and make thoughtful stock choices. Market fluctuations are expected to create opportunities to enter stocks at favorable prices, but investors must be discerning to avoid overpaying during volatile periods.
