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Ever since the Modi government has come to power, <keyword id="6484188" type="CITY" weightage="20" keywordseo="Sensex">Sensex</keyword> had been climbing to new highs. However, in the recent times Sensex seems to have entered the slipping mode. Though these dips have not been that significant (except for the 600-pt slip recorded today), but investors are very worried. The million dollar question is: Should they worry at all? 
 
Not really, suggests Economic Times article titled 5 reasons behind Sensex's 600-pt slip and why investors needn't worry. As per this article, five factors mentioned to be playing spoilsports in the market are: 
 
1. Rupee losing ground 
 
Since June last year, US dollar has grown from strength to strength over rupee. However, analysts aren’t treating this trend alarming. A market watcher, while speaking to the ET opined that considering a composite basket and not just rupee dollar, it has been found that rupee has actually strengthened a little in the last year. 
 
2. Fed rate hike and higher volatility 
 As per the ET report, a market watcher said that as the market adjusts to the US <keyword id="37018" type="UNKNOWN" weightage="20" keywordseo="interest-rate">interest rate</keyword> cycle, it would fluctuate between 8500 on the downside and 9100-9200 on the upside for next few weeks. 
 As a benefit for long term investors, a 5% to 7% correction in the market will fuel the <keyword id="34412" type="ORGANIZATION" weightage="20" keywordseo="economy">economy</keyword> and corporate earnings at the same time. 
 
3. Good return after 2 years 
 
The Economic Times report has further revealed that market being volatile over next 12 months one cannot expect a return of 25%-30%. Vibhav Kapoor, Group CIO of IL&amp;FS has confirmed to the ET that if economy prevails at the same motion like now, good return is expected in next two years. 
 
4. FY17 – Happy Days 
 While analysts are positive of a higher growth gradually, FY15 earnings might be below 5%. Though FY16 would be better and might witness earnings around 13%-15%, it is FY17 when the financial experts are expecting a turnaround. Nilesh Shah, MD and CEO of <keyword id="97794" type="COMPANY" weightage="20" keywordseo="Kotak-AMC">Kotak AMC</keyword> told ET that earnings can go above 22% in FY17. 
 
5. Technical factors 
 <keyword id="6354813" type="COMPANY" weightage="20" keywordseo="nifty">Nifty</keyword> with intraday low of 8850 last week has been bouncy for quite sometime. Slipping further, Nifty is stable at 8800 today but may break 9000 level soon. <keyword id="622948" type="ORGANIZATION" weightage="20" keywordseo="GEPL-Capital">GEPL Capital</keyword> report states that if it breaks 8850 level, it may droop at 8800-8740 level in future. 
 
Analysts have opined that if 9,100 can’t be achieved very soon, extreme volatility, negative bias and stock specific action would continue. 
 
(Image: Reuters)

5 reasons why investors
shouldn’t worry about the slipping Sensex

Happy Friday eve, readers. Phil Rosen here. Surprising no one, the Fed <a href="https://www.businessinsider.com/did-fed-raise-interest-rates-may-pause-hikes-jerome-powell-2023-5">raised interest rates by 25 basis points</a> yesterday. That puts the Fed Funds Rate above 5% for the first time since 2007. Remember, the higher that goes, the more expensive it becomes for consumers and businesses to borrow.The move marked the 10th consecutive hike, but the Fed nodded to the possibility that it was the last one of this cycle — <a href="https://www.businessinsider.com/did-fed-raise-interest-rates-may-pause-hikes-jerome-powell-2023-5">more on that here. </a>As for today, we're bringing you on the ground reporting from one of the <a href="https://www.businessinsider.com/credit-crunch-forecasts-milken-institute-global-conference-highlights-real-estate-2023-5">top investing conferences in the world</a>. If this was forwarded to you, <a href="https://www.businessinsider.com/subscription/newsletter/10-things-opening-bell">sign up here</a>. Download Insider's app <a href="https://www.insider.com/app">here.</a><a href="https://www.businessinsider.com/milken-2023-federal-reserve-interest-rate-hike-outlook-preview-highlights-2023-5"></a>1. Elite money managers overseeing trillions of dollars convened at the 2023 Milken Global Conference in Los Angeles this week. With the Fed's decision looming, their rate forecasts looked further into the future, and Insider's Akin Oyedele had a front-row seat. The consensus was clear: they think markets are <a href="https://www.businessinsider.com/milken-2023-federal-reserve-interest-rate-hike-outlook-preview-highlights-2023-5">mispositioned for a scenario where the central bank keeps rates higher for longer</a>."It's hard for me to imagine the Fed lowering rates to the degree that is priced in without a much more serious economic downturn," Karen Karniol-Tambour, co-CIO of Bridgewater Associates said at the conference. "And either one of those scenarios is <a href="https://www.businessinsider.com/milken-2023-federal-reserve-interest-rate-hike-outlook-preview-highlights-2023-5">not very good for markets</a>."According to the CME FedWatch Tool, investors see the odds of a rate cut rising steadily starting this summer, and are pricing in almost a 50% chance that the central bank drops its benchmark rate at the September meeting. David Hunt, president and CEO at PGIM, echoed the Bridgewater exec's sentiment, saying that rates are <a href="https://www.businessinsider.com/milken-2023-federal-reserve-interest-rate-hike-outlook-preview-highlights-2023-5">"without a doubt"</a> going to stay higher for a longer stretch than what markets have priced in. "As our chief economist likes to say," Hunt said, "at higher rates, <a href="https://www.businessinsider.com/milken-2023-federal-reserve-interest-rate-hike-outlook-preview-highlights-2023-5">bodies will continue to float to the top</a> over the course of the summer."We've already witnessed some "bodies" emerge with the failure of multiple banks in the last two months. And with yet another Fed rate hike officially in the books, financial conditions are only going to get tighter and more companies could be caught off-guard.Hunt anticipates the clamp-down on the banking system to <a href="https://www.businessinsider.com/credit-crunch-forecasts-milken-institute-global-conference-highlights-real-estate-2023-5">limit available credit and firms' capital bases</a>. Here's how he put it: "We are going to see now a real slowing that begins to happen to aggregate demand because of the <a href="https://www.businessinsider.com/credit-crunch-forecasts-milken-institute-global-conference-highlights-real-estate-2023-5">decrease in the supply of credit that's coming in</a>."Rishi Kapoor, the co-CEO of Investcorp, which manages $50 billion in assets, said at the conference that the property sector looks <a href="https://www.businessinsider.com/credit-crunch-forecasts-milken-institute-global-conference-highlights-real-estate-2023-5">extra vulnerable</a> in light of recent events."No doubt that the second- and third-order effect of the banking sector fallout in the US, in particular, is going to cause a <a href="https://www.businessinsider.com/credit-crunch-forecasts-milken-institute-global-conference-highlights-real-estate-2023-5">constraining of financial conditions</a> and lending," Kapoor said. "The commercial real estate sector in particular, which was 50%-plus from the regional banking system, is definitely going to be limited."What's your economic outlook for the rest of 2023? Tweet me (<a href="https://twitter.com/philrosenn" target="_blank" rel="noopener">@philrosenn</a>) or email me (prosen@insider.com) to let me know.In other news:<a href="https://markets.businessinsider.com/news/commodities/russia-gold-economy-sanctions-ukraine-obscure-buyers-war-markets-bullion-2023-5"></a><div type="image" title="russia putin" height="1500" width="3001" msid="99987147" hostid="261" sizebytes="244400"></div>2. US stock futures trade mixed early Thursday, following the Fed's latest rate hike. Investors will be watching key reports that will inform the Fed's next moves, including data on initial jobless claims, due later today. <a href="https://markets.businessinsider.com/premarket?nr_email_referer=1&amp;utm_source=Sailthru&amp;utm_medium=email&amp;utm_content=Opening_bell&amp;utm_campaign=Post%20Blast%20%20:%20The%20stock%20market%20is%20going%20to%20be%20trading%20flat%20as%20long%20as%20risk-free%20assets%20offer%20much%20more%20yield&amp;utm_term=10%20THINGS%20BEFORE%20THE%20OPENING%20BELL%20SEND%20LIST">Check out the latest market moves</a>.3. Earnings on deck: Apple, Shell, and more, all <a href="https://markets.businessinsider.com/earnings-calendar">reporting</a>.4. Meet a Baillie Gifford manager who oversees a $564 million fund. She detailed the top four investing themes she's pursuing now — <a href="https://www.businessinsider.com/best-growth-stocks-to-buy-luxury-goods-investing-baillie-gifford-2023-5">including three of her favorite stock picks</a>.5. Goldman Sachs said retail investors have "rage sold" out of the stock market. That's the group that drove the pandemic trading boom just two years ago, but analysts estimated that they've now sold twice what they acquired during that time. <a href="https://markets.businessinsider.com/news/stocks/retail-investors-rage-sold-out-of-stock-market-trading-boom-2023-5">Get the scoop</a>.6. The housing market is starting to show signs of a rebound. If you look at cancellations for homes under construction, the quarterly decline is dramatic. <a href="https://markets.businessinsider.com/news/commodities/housing-rebound-market-cancellation-rates-crash-pandemic-boom-levels-property-2023-5">Currently, that indicator is nearly in line with what was seen at the height of the housing boom in March 2022</a>.7. Russian gold is flooding the UAE, Turkey, and Hong Kong. After wartime sanctions took hold, key Western buyers including JPMorgan stopped buying Russian bullion, so sellers have had to seek new markets. <a href="https://markets.businessinsider.com/news/commodities/russia-gold-economy-sanctions-ukraine-obscure-buyers-war-markets-bullion-2023-5">Get the full details here</a>.8. Real-estate wealth manager David Wieland shared a low-risk strategy that his mom-and-pop clients have used for decades to scale their portfolios. <a href="https://www.businessinsider.com/how-to-scale-up-real-estate-investing-portfolio-strategy-advice-2023-5">Plus, he broke down what it takes to become a millionaire "hiding in plain sight."</a>9. A $1.1 trillion investment chief explained her three-part checklist for confirming a recession has started. While Nuveen Asset Management's Saira Malik is expecting a downturn to hit in the next year, she still sees opportunities for buying. <a href="https://www.businessinsider.com/stocks-to-buy-recession-milken-institute-global-conference-highlights-nuveen-2023-5">These are the four stocks she recommended</a>.<a href="https://markets.businessinsider.com/news/commodities/oil-prices-wti-us-recession-outlook-economy-fed-rates-inflation-2023-5"></a><div type="image" title="Oil (WTI) price on May 4, 2023" height="920" width="1120" msid="99987151" hostid="261" sizebytes="21152"></div>10. Oil prices have declined with markets increasingly concerned about a recession. On Wednesday, West Texas crude dropped more than 4.4%, the steep declines coming the same day as the Fed's rate hike. <a href="https://markets.businessinsider.com/news/commodities/oil-prices-wti-us-recession-outlook-economy-fed-rates-inflation-2023-5">US oil prices are now trading below $70 a barrel</a>.Curated by Phil Rosen in New York. Feedback or tips? Tweet <a href="https://twitter.com/philrosenn" target="_blank" rel="noopener">@philrosenn</a> or email <a href="mailto:prosen@insider.com" target="_blank" rel="noopener">prosen@insider.com</a>.Edited by Max Adams (<a href="https://twitter.com/maxradams?lang=en" target="_blank" rel="noopener">@maxradams</a>) in New York and Hallam Bullock (<a href="https://twitter.com/hallam_bullock" target="_blank" rel="noopener">@hallam_bullock</a>) in London.

Elite investors and fund managers at the legendary Milken conference warn of a recession and credit crunch

The stock markets have been in a buoyant mood ever since <keyword id="6354477" type="PERSON" weightage="40" keywordseo="Narendra-Modi">Narendra Modi</keyword> was named the BJP's prime ministerial candidate on 13 September last year. With Indian voters giving the National Democratic Alliance (NDA) a clear mandate, the markets turned euphoric. On the 16 May, the day of vounting, the Sensex opened up by more than 1,000 points and then breached the historic 25,000 mark. 
 Now that the markets have safely negotiated possibly the year's biggest event risk, <keyword id="6416579" type="UNKNOWN" weightage="40" keywordseo="Retail-investors">retail investors</keyword> need to reformulate their stock market strategy: should those who have been sitting on the sidelines enter the markets now in anticipation of the bull run continuing? And, for those who entered the markets earlier, is it time to book profits in view of stretched valuations? 
 
Cast a fresh eye on your portfolio 
 
Investors with a short-term investment horizon, who have made substantial profits from the current run-up, may encash their gains. "Investors who got in at lower levels should book partial profit and wait for a correction to re-enter," says Vibhav Kapoor, Group CIO, IL&amp;FS. The rationale: the markets have already factored in the positive news and valuations are getting stretched. 
 Long-term investors, on the other hand, may continue to hold on to their investments. "The overall long-term trend is positive," says Kapoor. Adds Shankar Sharma, vice-chairman and joint managing director, First Global: "India's fundamentals are among the best in the world right now, so hold on to your equity investments." Raamdeo Agrawal, joint managing director, Motilal Oswal <keyword id="6354241" type="COMPANY" weightage="40" keywordseo="Financial-Services">Financial Services</keyword>, concurs. "The long-term story is just starting, so investors should continue to be in equities for the next five years," he says. 
 
Adds Andrew Holland, CEO-Equities, Ambit Capital: "Foreign investors are very positive, so the high inflows may continue for a few more months." Events like the Union Budget and important economic policy announcements are expected to keep the markets buoyant over the next few months. 
 
 
 
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Which segment should you bet on? 
 Should you seek refuge in the relative safety and stability of large-caps, or should you aspire for the higher returns that mid- and small-cap stocks can potentially offer? Remember that these three segments rarely move up in tandem. The large caps led the charge when Narendra Modi was anointed prime ministerial candidate. Only later did the mid- and small-cap counters take over from them. The BSE Mid- and Small-cap indices have gained much more than the Sensex since 13 September. This trend may continue in the future as well. The large-cap stocks are gaining again now, which implies that mid- and small-caps may play catch-up later, once large caps enter correction mode. The mid- and small-cap indices are also quoting at a discount to the large-cap index. However, <keyword id="47916" type="UNKNOWN" weightage="40" keywordseo="invest">invest</keyword>ors need to invest in each stock on its own merit, based on its growth prospects and current valuation. "It would not be correct to brand the entire mid- and small-cap segment as undervalued or overvalued. Investors should go company-wise," says Swapnil Pawar, chief investment officer, Karvy Capital. 
 
 
 
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Which are tomorrow's sectors? 
 
With the NDA winning a clear mandate, the surge in economy-related stocks may continue. Enter these sectors whenever the markets take a breather. "We continue to like cyclicals," says Holland. One of the new government's top priorities will be to kickstart the investment cycle by expediting clearances. Since the executive wing of the government is likely to work with a sense of urgency, sectors like infrastructure, construction, capital goods and power are expected to fare well. 
 
Another sector expected to benefit from an economic turnaround is financials. But private and public sector banks will go their own separate ways. The former are expected to increase their share of the market pie. Unlike their public-sector peers, they don't have NPA (non-performing assets) related concerns. An economic recovery augurs well for public sector banks as well since it will reduce NPAs throughout the system. While the resolution of NPA-related concerns may take a few quarters, prices of PSU bank stocks may run up much earlier. 
 The oil and gas sector too is in a sweet spot currently. An appreciating currency will favour this sector by lowering its subsidy burden. Since its low of 68.85 vis-a-vis the dollar on 28 August, 2013, the <keyword id="6355302" type="ORGANIZATION" weightage="40" keywordseo="Rupee">rupee</keyword> has strengthened considerably. While this may be attributed largely to the government and the RBI reining in the current account deficit (CAD), the expectation of a business-friendly government taking over after the elections has also led to the inflow of dollars, which has pushed the rupee above the 59 level. The RBI may buy dollars to slow down the pace of the rupee's appreciation, but the currency may nonetheless strengthen in the short run. The new government is also expected to resolve the vexed issue of gas and oil pricing, which will be another shot in the arm for the sector. 
 
Despite global demand improving, the rupee's appreciation could act as a headwind for IT companies in the next few quarters. If sectoral rotation continues and money keeps on moving out of defensives and into cyclicals, there will be added pressure on IT stocks. Avoid this sector for the time being. 
 
Other export-oriented sectors such as textiles and leather may also suffer on account of the rupee strengthening. The domestic slowdown in China may lead to heightened competition from Chinese exports. Import substitution sectors like metals are also in the same boat. 
 
 
 
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Pharmaceutical, another export-oriented sector, is expected to fare better. While it too will be hit by the currency's appreciation on the external front, the picture in the domestic market is improving. The sector has already put the troubles caused by the drug price control order (DPCO) of 2013 behind it. 
 Cyclical rotation may hurt some of the defensive stocks in the short term. However, the fundamentals of sectors like auto and <keyword id="34523" type="CITY" weightage="40" keywordseo="fmcg">FMCG</keyword> will improve as domestic demand rises. The demand for premium products, which carry higher margins, is expected to improve in the wake of an economic recovery. A stronger rupee will also lower the cost of imported raw materials for many of these players. Try to latch onto some of the reasonably priced stocks in these sectors whenever the markets correct. 
 
Stocks of a few industrial groups, such as Adani, have done well ever since Narendra Modi became the BJP's prime ministerial candidate. Since momentum still favours these stocks, you may continue to hold on to them for the time being.

You Searched For "Vibhav Kapoor Group CIO" and got 3 results

5 reasons why investors shouldn’t worry about the slipping Sensex

BI India Bureau

Elite investors and fund managers at the legendary Milken conference warn of a recession and credit crunch

Phil Rosen

Narendra Modi's NDA Government Elected To Power: Where Should You Invest Now?

Economic Times

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