Want to deploy cash after stock market crash on June 4? Marathon Trends’ Atul Suri has suggestions for you

Tuesday brought trouble for equity investors on Dalal Street as the market capitalisation (m-cap) of BSE-listed firms tanked by Rs 31 lakh crore after vote-counting trends showed that INDIA block has put up a better fight than anticipated and that PM Narendra Modi-led NDA is unlikely to win with a huge margin. The combined m-cap of BSE-listed firms retreated to Rs 394.84 lakh crore on June 4 against Rs 425.92 lakh crore on June 3. The benchmark equity index BSE Sensex lost 4,389 points, or 5.74% to settle the day at 72,079 on June 4.

The vote-counting trend at around 5.10 pm (IST) showed that the NDA led with 298 seats, while INDIA was ahead in 228 seats. Most exit polls had predicted that the NDA could win over 350 seats, and some even predicted that the tally could cross 400 out of 543 seats. Should how investors should deploy after the stock market crash on June 4? In an interaction with BTTV, Atul Suri, CEO, Marathon Trends PMS said that markets grappled with uncertainty as election trends sent shockwaves through the market.

“The market was expecting a one-sided outcome. The exit poll that came out over the weekend further amplified the optimism. The vote counting which came out was a shock for the market. There was a lot of panic as the market was thinking that 300 seats would come. Things will cool off after a short volatility for a day or two,” Suri said.

While sharing his advice with investors who are sitting on the sidelines, the market veteran said one should utilise the market dip and deploy around 50% of the cash.

With the potential realignment of government priorities, he believes that some sectors like FMCG may benefit from rural development initiatives.

“One of the places where BJP are losing is the place where we saw farmers protest. There is a sense that the party will try to address this issue. That would lead to a monetary push into those areas. This will lead to the kind of rural consumption or revival in FMCG space,” Suri said adding priorities of the government will change.

With a gain of 0.15%, FMCG was the only sectoral index that ended in green on BSE on June 4. On the other hand, BSE Capital Goods, BSE Oil & Gas and BSE Power declined 12%, 13%, and 14%, respectively.

Despite the sharp selling, Suri retained a bullish view of Indian equity markets from a long-term perspective. In terms of investment strategy, Suri said one should invest in large-cap stocks for stability, especially in times of uncertainty. While acknowledging the allure of small-caps, he warns of their inherent volatility and suggests investors wait for clarity before lapping into the risky segment.

For those who may have missed out on recent rallies, Suri said he is bullish on capital goods, infrastructure and engineering sectors. “With India’s ongoing need for infrastructure development, these sectors stand to benefit from government investment and could play a pivotal role in the nation’s growth trajectory,” he said.