'Sell in May and Go Away' Strategy Unlikely This Year: Experts

The stock market adage 'Sell in May and Go Away' is likely to be proved wrong this year amid the euphoria over hopes of reform-oriented government at the Centre post general elections, and consistent foreign fund inflows, according to experts.

"This popular market saying may not work this time as Indian markets are doing good. Global markets are also supportive. May 16 will be the deciding day," Ashika Stock Brokers' research head Paras Bothra said.

"Markets may see high volatility, but no major selling is likely," he said.

The 'Sell in May and Go Away' strategy is that sell stock holdings in May and gets back into the equity market in November, avoiding the typically volatile May-October period.

This strategy is seen as better than an investor who stays in equities throughout the year.

Barring last year, stock markets witnessed selling in May in the previous three years.

The benchmark Sensex had tumbled 6.26 per cent in May 2012. In 2011, the index lost 2.6 per cent and in 2010 it fell by 2.53 per cent.

The Sensex, however, had gained 24.53 points in May 2013.

"Minor correction may happen this month but no major selling is likely to happen. 'Sell in May and Go Away' may not happen this time," Geojit BNP Paribas Financial Services' research head Alex Mathews said.

"If BJP comes to power after elections, it will be taken as a signal for stability in the economy and stock markets will take it very positively and a significant upside could be seen which will take market to completely new higher levels," CapitalVia Global Research founder and chief executive Rohit Gadia said.

The levels may be as high as 7,300-7,800 gradually in Nifty, he added.

The BSE benchmark Sensex has gained 1,247.12 points or 5.89 per cent so far in 2014.

Net investments by foreign institutional investors (FIIs) into Indian equity markets since the beginning of 2014 have crossed $5 billion (over Rs 30,000 crore), while the same for debt markets stand near $5 billion (about Rs 29,000 crore) - taking the total to close to Rs 60,000 crore.