Market experts feel that investors should wait for the rupee to stabilise before they go ‘all-in' with their investments. The market sentiments were dampened when the rupee touched the Rs 55 mark against the dollar on Monday.
“The impact of the currency will be felt across sectors relying on imports. Investors should wait for the Rupee to stabilise before they make all their investments,” said Mr Kishore Ostwal, CMD, CNI Research Ltd. “Oil stocks will be impacted but the impact will only be a short term one. The VIP stock will be mainly impacted as it imports 70 per cent of its raw material from China,” he said.
put 50% now
Analysts also believe that staggered investments make sense at this point. “Investing in a programmed or sequential manner can give investors good returns. There can be a 50 per cent investment now and the rest can be invested later,” said Mr Gaurang Shah, Assistant VP, BNP Geojit Paribas. Analysts expect the Rupee to further depreciate to Rs 57 levels against the dollar.
Companies in the capital goods sector, oil sector and those having ECBs will be affected negatively by the depreciating Rupee. The IT sector benefit from the fluctuation, said Ms Madhumita Ghosh, Head of Research, Unicon Financial Intermediaries.
Foreign Institutional Investors (FIIs) will wait and watch at the moment and then buy aggressively, say analysts. “I have noticed that FIIs start buying at the ‘u-turn' moment of the Rupee. It is the time when the Rupee begins improving slightly after reaching the peak of its depreciation,” said Mr Ostwal.
FIIs invested Rs 10,357 crore in equity in January and Rs 25,212 crore in February. During this period the Rupee fluctuated from Rs 53 to Rs 49, a dollar.