'Anulom-Vilom' - Motilal Oswal's Raamdeo Agrawal on Current Jitters in Stock Market
‘anulom-vilom’ – motilal oswal’s raamdeo agrawal on current jitters in stock market
Market veteran and Chairman of Motilal Oswal Group Raamdeo Agrawal, on Friday said that the current volatility in the Indian stock market is a healthy phenomenon. Speaking exclusively to Nikunj Dalmia, Editor-in-Chief, ET NOW and ET NOW SWADESH, Agrawal likened the ongoing correction in the equity indices to ‘anulom-vilom’ and added that the uncertainty in the markets will continue till June 4, when the results of Lok Sabha Elections 2024 are set to be declared.
“There was no correction in the market and most of the people don’t like any drop in the market, which is not the phenomena of the market. It must correct,” he said. Drawing a parallel, he invoked ‘Anulom-Vilom’, stating that one can’t always have ‘Anulom’ and ‘Anulom’ without ‘Vilom’, similarly, in the market, fluctuations are necessary.
Continuity Key Amidst Election Speculation
Addressing the burning question of whether markets are banking on the continuity of the current regime, Agrawal underscored the pivotal role of policy continuity in sustaining investor confidence. According to him, the maintenance of existing policies is paramount, with corporate earnings and performance taking precedence. He highlighted the potential for a substantial 15-20% increase in earnings should policy continuity prevail. Additionally, Agrawal emphasized the significance of the upcoming monsoon season, citing its potential to invigorate the rural economy. Over the next 12 months, he identified policy continuity, monsoon performance, and capital expenditure as the key triggers for market dynamics.
Navigating Market Numbness and Post-Election Prospects
Amidst the prevailing market numbness in recent days, concerns lingered about potential post-election turbulence. Agrawal addressed this apprehension, asserting the inevitability of market corrections. Contrary to popular sentiment, he viewed the current correction as a positive development, deeming it “very healthy” for market dynamics. Agrawal also alluded to the underlying risks associated with election uncertainties and foreign institutional investor (FII) selling.
New Investors and Election Jitters
Agrawal shed light on the behaviour of a burgeoning class of investors and their response to the upcoming elections, marking their inaugural encounter with such a significant event since the onset of the COVID-19 pandemic. He attributed the emergence of this new wave of investors to systematic investment plans (SIPs), emphasizing the importance of maintaining SIPs even during market downturns. Nevertheless, Agrawal acknowledged that investors with direct market experience might experience bouts of apprehension during such periods.
Market Reaction: Preparedness Amidst Volatility
Contemplating a scenario where markets react unfavourably to the election verdict, Agrawal remained resolute, expressing readiness to seize opportunities amidst a potential 10-15% market decline.
Amidst the election fervour gripping the markets, Raamdeo Agrawal’s insights underscore the imperative of policy continuity, resilience amidst market corrections, and a proactive approach to navigating potential post-election volatility.
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