Sell in May and Go Away strategy unlikely this year: Experts

Tags: News
The stock market adage 'Sell in May and Go Away' is likely to be proved wrong this year amid the euphoria over hopes of reform-oriented government at the Centre post general elections, and consistent foreign fund inflows, experts said.

"This popular market saying may not work this time as Indian markets are doing good. Global markets are also supportive. May 16 will be the deciding day .... Markets may see high volatility, but no major selling is likely," said Ashika Stock Brokers, Research Head, Paras Bothra.

Barring last year, stock markets witnessed selling in May in the previous three years.

The benchmark Sensex had tumbled 6.26 per cent in May 2012. In 2011, the index lost 2.6 per cent and in 2010 it fell by 2.53 per cent.

The Sensex, however, had gained 24.53 points in May 2013.

"Minor correction may happen this month but no major selling is likely to happen...'Sell in May and Go Away' may not happen this time," said Geojit BNP Paribas Financial Services, Research Head, Alex Mathews.

"If BJP comes to power after elections, it will be taken as a signal for stability in the economy and stock markets will take it very positively and a significant upside could be seen which will take market to completely new higher levels," Rohit Gadia, Founder and CEO, CapitalVia Global Research Limited said.

The levels may be as high as 7,300-7,800 gradually in Nifty, he added.

The BSE benchmark Sensex has gained 1,247.12 points or 5.89 per cent so far this year.

The net investments by FIIs into Indian equity markets since the beginning of 2014 have crossed $ 5 billion (over Rs 30,000 crore), while the same for debt markets stands near $ 5 billion (about Rs 29,000 crore)-- taking the total to close to Rs 60,000 crore.

The 'Sell in May and Go Away' strategy is that sell stock holdings in May and gets back into the equity market in November, avoiding the typically volatile May-October period. This strategy is seen as better than an investor who stays in equities throughout the year.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • Banks must learn from past mistakes to promote financial inclusion

    Prime minister Narendra Modi launched a massive financial inclusion programme yesterday titled “pradhan mantri jan dhan yojana’ (PMJDY), that will

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Urs Schöttli

West Asia turmoil worries east Asia

From Beijing to Jakarta, from Manila to Tokyo, east Asian ...

Parvez Imam

Sowing the seeds of love for hatred

No wonder we have a whole lot of talking going ...

Dharmendra Khandal

Time to protect our endangered wildlife species

After 65 million years of existence, the earth’s biodiversity is ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture