The Indian market has experienced profit booking and a slight decline in benchmarks over the last two days, with the Sensex coming down by almost 2% and the Nifty falling 1.5%. The profit booking is due to concerns over high valuations and upcoming central bank meetings.
At present, the Nifty PE (price-to-earnings ratio) stands above 20 based on FY24 estimated earnings, making India one of the most expensive markets globally. With high valuations, negative triggers could lead to a sharp correction. However, some experts believe that the party may continue in the near term despite these concerns.
The ongoing correction is not considered a major concern by experts, and they do not recommend trimming exposure to equities. In fact, they view it as an opportunity to buy quality stocks, as valuations are still reasonable. India’s earnings growth trajectory is expected to remain healthy, and the country is expected to relatively outperform its peers.
Experts advise against mindless buying and recommend a long-term view to investing. Investors should focus on their goals, risk appetite, time horizon, and diversification strategies, and consider systematic investment plans for better results.