‘Sell out in May’! Elections are going on in the country, should this strategy be adopted in the stock market?

Stock Market Strategy:Talking about the year 2024, the bullish trend in the market continues like the last months of 2023. This year Sensex and Nifty made their new peak. In April, Sensex broke the historic level of 75000. At present, the ongoing bullish trend in the stock market for the last 3 months is likely to continue in May also. The reason for this is the expectation of better economic growth and the return of the current government to power in the general elections.Political Certainty)With the possibility of arrival and strong participation of domestic investors, investor sentiment is expected to be positive. Experts say that usually investors used to adopt selling strategy in May, but this trend may change this year.

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The bullish trend will continue

Arvinder Singh Nanda, Senior Vice President, Master Capital Services Limited, said that overall, the bullish trend in the market (Stock Market Rally)Expected to continue. One of the main reasons for this is the strong participation of individual investors along with domestic institutional investors. He said that if the earnings of companies remain better in the coming days, then the bullish trend in the market is expected to continue. Nanda said that if tensions in West Asia ease, companies’ financial results remain good and the Chinese economy shows strength, then market sentiment is likely to remain strong.

Mid and small cap markets continue to rise

Sunil Nyati, Managing Director of Swastika Investmart Limited, says that despite concerns about high valuations since the beginning of this year, the shares of mid and small sized companies have continued to rise. This is due to adequate domestic liquidity and positive outlook for the Indian economy (Indian Economy)Has to happen. He said that this better performance of small companies explains the trend seen in the previous big markets at the global level. This shows that the Indian markets are probably also in the same phase of growth.

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‘Sell in May and walk away’

Suman Banerjee, CIO at hedge fund Hedonova, said that considering the historical data, it is clear that the traditional ‘sell in May and walk away’ strategy may not hold true given the current market conditions and especially the general elections. Is. As per the strategy, an investor sells his shares in May and avoids investments during May to October which are generally considered volatile. Then in November the equity returns to the stock market. Nyati said that now the saying ‘sell in May and stay away from the market’ has become old. Statistics do not confirm this. He said that we believe that despite the delay in interest rate cut and increase in bond yields in America, the market will remain bullish. Our strong domestic economy along with positive results in many sectors are keeping the situation balanced. Apart from this, the possibility of returning the current government back to power in the current elections is also maintaining momentum in the market.

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Sensex breaks historic level

Arvinder Singh Nanda said that the market has reached record high due to many reasons. Firstly, the strength of the Indian economy coupled with positive market sentiment has boosted investor confidence. BSE Sensex reached its all-time high level of 75,124.28 points during trading on 9 April 2024 this year. The index crossed the historic level of 75,000 for the first time on the same day. The Sensex closed above 75,000 points for the first time on April 10. The market capitalization of companies listed on BSE crossed Rs 400 lakh crore for the first time on 8 April 2024.