What investment opportunities are left after recent fall in stock market?

After touching record high in recent times, the share market has witnessed correction from upper levels. Market sentiment has deteriorated due to rising interest rates in America, selling by foreign investors, rise in crude oil due to the Israel-Palestine war, etc. Due to all this, the Nifty and Smallcap indices are about 2% below their record highs but despite 2 days of recovery in the market, the Nifty Mid100 index of midcap shares is about 3% below its highs.

So this gives an opportunity to investors to build a portfolio and there are three or four reasons based on which investment can be made.

First of all, RBI has kept the repo rate stable at 6.5% four consecutive times.

Second, HDFC Bank as well as YES Bank have started cutting FD rates. This has increased the hope of ending the era of expensive loans.

The third is the fall in crude oil prices from the recent high of around $97, which will reduce the fear of inflation. Fourth is the sales figures of auto, realty sector in the festive season, which are at the highest in many years.

And the last one is the buying by mutual funds through SIP investments to counterbalance the selling by foreign investors.

But if one is looking for such shares that are available under Rs 500 as one wants to invest only Rs 70,000-80,000.

And if he or she  wants to pick good shares and and get large quantity. But shares below Rs 500 does not mean that one will make any kind of compromise in the selection of shares.

One would look for such stocks whose valuations are not only cheap, along with growth in profits in the last quarter, the debt-to-equity ratio should also not be high. But there should not be holding high debt. Not only this, the RoCE, i.e. Return on Capital Employed, of these companies should also be good.

RoCE is a financial ratio which shows how efficiently the company is using capital to earn profits.

The following are some of the shares that could met hese conditions. Apart from largecaps like ITC, Wipro, Adani Power, BEL, NMDC, RVNL, IGL, Petronet LNG, there are also a few midcaps like Castrol, IRCON and Aditya Birla SunLife AMC.

So which shares should one invest in?

Market expert Santosh Kumar Singh believes that at present there is risk related to global debt and geopolitical tensions in the market. Hence, any investment should be made thoughtfully and slowly.

According to Santosh Singh, out of these 14 stocks, investors should invest in BEL, Wipro and NMDC with a perspective of at least 1-2 years where there is a possibility of getting 30-60% returns. Apart from this, entry can also be made in Jindal Stainless i.e. JSL at 20-25% fall.

So even though the market is recovering after correcting from record highs, it may be too early for investors to invest all at once. So one should gradually invest in selected stocks for a long time.

(Disclaimer: Stock recommendations by experts or brokerages are their own and not those of the website or its management. Money9.com advises readers to check with certified experts before taking any investment decisions.)