Mumbai, July 1: The markets appear to be on the verge of a take-off while significant upside is likely in the short term, said former BSE president Deena Mehta.
“The markets appear to be on the verge of a take-off, and I see that a significant take-off happening within six to nine months period,” Mehta, who is the chairperson of Indian Merchants Chamber's (IMC's) Capital Markets Committee, said.
Over the past one or two decades, dynamics of the domestic stock markets have completely changed, giving rise to 30-40 percent short-term machine trading, wherein companies keep on generating orders in large numbers.
In this fleeting, volatile scenario, retail investors have become a confused lot, she said over the weekend.
“Despite such negative factors, the domestic markets had held on owing to a robust underlying optimism and positive economic indicators.
After losing 25 percent in 2011, the market has gained over 12.5 percent in 2012,” Mehta said.
SBI Mutual Fund CIO Navneet Munot told a seminar organised by IMC here that the current phase of volatility is due to poor governance at the Centre, besides economic crisis faced by many countries in the Eurozone, policy paralysis and political indecision resulting in lack of key structural reforms.
“However, I feel it is going to lead to some action from the government now, which was missing and had caused concerns for investors,” he said, adding the investors need to take the right step at right time to invest in companies/instruments that can give “above normal” returns.
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