Brokerage houses on Friday cautioned investors against making an entry even as benchmark stock indices recovered after hitting the lower circuit of 10 per cent, saying the impact of coronovirus pandemic is still lingering.
If someone is buying stocks, they should do so only with a medium to long term investment horizon and not to make a quick buck, they advised investors.
Immediately after opening, trading had to be halted on both the BSE and NSE on Friday as the indices hit the lower circuit after a fall of over 10 per cent. However, after opening in 45 minutes, they zoomed to be in the green as against the previous day's close.
The selling was in line with global peers and possibly also a reaction to the first Indian death due to the virus pandemic.
"Investors should avoid taking any knee-jerk reaction to the current sell-off," asset manager Axis Mutual Fund said in a note, advising that fresh investments should be spread over 3-6 months time.
Foreign brokerage Bank of America Securities made it clear that it is "not yet" the time to buy, reasoning that the Covid-19 sentiment is still driving the markets and major global markets will first have to contain the pandemic.
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Containment of the virus will have an economic cost as it may require drastic lockdowns and also economic checks.
It is not a "kid in toy shop" moment in India, it warned, pointing out that stocks which can deliver steady growth are still far from being cheap.
However, domestic brokerage ICICI Securities was more optimistic.
"We see the current correction as a buying opportunity for the investors who should utilise the declines to lap up the good businesses which have comfortable leverage, strong return ratios and enjoy leadership position," it said.
The BSE 30-share Sensex spurted 1,325.34 points while the Nifty reclaimed the 9,900 level after a highly volatile session.
Recovering over 5,380 points from its intra-day low of 29,388.97, the BSE Sensex ended 1,325.34 points or 4.04 per cent higher at 34,103.48.
Similarly, the NSE Nifty settled 365.05 points, or 3.81 per cent, up at 9,955.20. It hit an intra-day low of 8,555.15.