Yogesh Mehta, the Founder of Yield Maximiser, is of the opinion that the domestic equity market will likely remain within the current range until the election results are announced. According to him, the NSE Nifty index could fluctuate between 21,700 and 22,800 until June 4. This aligns with the 1.86% recovery of the 50-share index for the week ending May 17, following a 1.87% decline in the previous week. Currently, the NSE Nifty index is at 22,466 levels.
Mehta anticipates that sectors like railways, infrastructure, defence, power, and public sector undertakings (PSUs) could offer substantial returns to investors if Prime Minister Narendra Modi secures another term. Stocks from these sectors have already been performing well on Dalal Street, with companies like Astra Microwave Products and Hindustan Aeronautics witnessing significant gains. Mehta is particularly bullish on the PSU sector and recommends investors to consider stocks from the defence, power, and banking sectors.
He also warns that any adverse or unforeseen election outcome could lead to a sharp decline in the market. Mehta emphasizes that while the election results are crucial, midcaps and smallcaps have the potential for significant outperformance in the long run if one looks beyond the election scenario.
Mehta recommended new investors to consider investing through systematic investment plans (SIPs) and mutual funds with a clear long-term perspective. He also mentioned that for those who have a good understanding of companies, direct equities can be a viable option.
Mehta emphasized that equities have a higher growth potential compared to gold over the next decade. He pointed out that gold is an unpredictable asset class, with data indicating a 128% increase in the last five years and a 20% rise in the past year. In contrast, the BSE Sensex, a widely followed equity index, has shown a 97% growth in the last five years and a 19% increase in the previous year.