Sensex rides Modi wave but experts say sell now

Don’t wait for Modi to come to power… book your profits now: That is the message that market analysts are sending out as the Indian benchmark indices surged a massive five percent in the last three sessions. And this is even before the last phase of 16 Lok Sabha elections has come to an end. [caption id=“attachment_1519157” align=“alignleft” width=“380”] Image: Balraj[/caption] Voting is still on in UP, Bihar, West Bengal. At 1:46 pm, the BSE Sensex was at 23461, up 466 points and the Nifty had hit the 7000-mark, up +132 pts. The surge, in the eyes of many, is because the market is expecting a Modi win. Marketmen are factoring in a possible Modi victory and expecting exit polls to give the BJP+allies a 300+ tally and that is leading to the surge. But analysts are seeing this surge as an opportunity to book some profits off the table even before the results are out. “If something comes short of that, if he (Modi) is 30 or 40 seats short and they sort of have issues around forming a coalition government, you will see a lot of volatility in the next week or 10 days. The euphoria for outright win is just very-very large at the moment,” said Tarun Kataria, Independant Analyst told ET Now . In 2004 and 2009, the exit polls got it pretty wrong – underestimating the Congress and overestimating the BJP. So rather than wait for something similar to happen this time round, booking your profits should take priority. “This kind of rise has surprised everybody. We had kind of reconciled to a steady path till the exit polls come out. The point is that if there is even a modicum of uncertainty of a BJP not forming the government, it will be a fall-out which will be reminiscent of the last time that we had. It could even be a circuit breaker fall-out in my view,” Ajay Srivastava, CEO, Dimensions Consulting to ET Now . Noriko Kuroki, client portfolio manager-emerging markets equity at JPMorgan Asset Management, continues to see good value in Indian equities. However, she advises against adding positions aggressively at this juncture. She says investors should rather watch the election outcome as betting on it could prove to be futile. “Yes, history tells us betting on the election is rather a futile outcome. In politics we are not expert on politics, we look at companies, and we look at fundamentals of the company’s economic developments. So I think it is too risky to bet one way or the other just for the outcome of the elections, we would rather focus on what we are better equipped i.e. looking up companies, we are long-term holders of companies,” she told CNBC . Meanwhile, Samir Arora of Helios Capital, feels that is just the start of a much bigger run, but only if the elections results come in on expected lines. “If that is the kind of hype that people want to build in, you can imagine how far it will go if things turn out right, which is as good a probability as things going bad. But everybody is focusing on what will happen if it doesn’t work out,” he told CNBC-TV18 in an interview. But on the whole, the message seems to be to not go crazy and make the most of the good times.  Don’t wait for the Modi victory, ride the Modi wave, right here, right now.