While S&P BSE Sensex is down about 10 percent from the highs it hit in August, many small, mid and large-cap stocks have corrected way more than that in just a matter of months.
There are local and global triggers that led to the sudden fall in markets. On the macro front, the rise in crude oil prices as well as fall in rupee weighed on investor sentiment.
However, investors can use the opportunity to build their portfolio by buying into quality stocks with an investment horizon of 1-2 years, suggest experts.
The September quarter results were a mixed bag failed to lift investor sentiment. The upcoming results of state elections in December and general elections in 2019 will give enough entry points for investors as markets are likely to remain volatile, suggest experts.
“We have a preference for largecaps post the correction in valuations, with continued volatility and with important events (state elections) ahead, we see opportunities emerging in the mid-cap space also,” Gaurav Dua, Head of Research, Sharekhan by BNP Paribas told Moneycontrol.
“Improvement in the macro environment does have a positive impact on equities. Easing of crude oil prices, stability in rupee and its possible fallout on monetary policy has aided sentiment. Along with domestic macro factors, the sentiment in the Indian equity market has also been aided by the recent rally across emerging markets due to signs of peaking out of the continuous strengthening of the US Dollar,” he said.
On the sectoral front, Pankaj Pandey, Head-Research, ICICIdirect.com told Moneycontrol that he is positive on pharma (stabilised US, strong growth in India, improved margins), corporate banks (peaked out NPA cycle, asset resolution), IT (strong deal pipeline & valuation comfort) and capital goods (strong order inflows, improved working capital cycle).
ICICI Lombard General Insurance is the country's leading private sector general insurance company with a market share of 16.8 percent in that space. Overall, it is the fourth-largest player and held a market share of 8.2 percent as of March.
Few regulatory factors such as increasing FDI limit to 49 percent from 26 percent and mandatory cover of third-party motor insurance to three years for four-wheelers and to five years for two-wheelers bodes well for the industry.
In addition, the Company is investing heavily in emerging technologies such as artificial intelligence, automation, and machine learning to remove human intervention in the distribution of products and service claims, which helped the Company increase its market share in travel insurance to 24.9 percent in FY 2018 from 20.8 percent in FY 2017.
In the engineering segment, it went up to 11.2 percent from 9.8 percent, while fire insurance rose to 8.5 percent from 7.5 percent. The marine insurance increased to 12.7 percent from 11.7 percent.
