Given the developments, analysts expect fiscal and monetary support from the government and RBI to revive sentiment. However, recovery, they say, from these levels will be slow and painful.

'Investors should reduce cash gradually and look for value investing.'

Usually, a fall in oil prices is followed with a cut in retail prices of auto fuels and the government passes on the benefit to consumers. However, Morgan Stanley believes gains this time around will remain capped.

Gold, which was hovering around $1,321 an ounce in January 2019, has already breached $1,600 per ounce in the past few sessions to a seven-year high.

The social impact of this could be worse as 300 million subscribers may face the annoyance of network shutdown and churn.

Despite a slowing economy, the Budget does not envisage any major stimulus through the budgeted fiscal deficit figures, said Goldman Sachs.

'So, what does one believe -- just 6 stocks that are pushing the indices higher or the 600 scrips that are reflecting economic pain?'

A recent report by Citi had pegged the total amount stuck in stalled projects across seven major Indian cities (Bengaluru, Mumbai Metropolitan region, National Capital Region, Ahmedabad, Hyderabad, Kolkata and Pune) at Rs 80,000 crore.

'The announcement has come too late. This should have been done years ago.'

So far in September, the S&P BSE Small-cap index has gained nearly 3 per cent as compared to a modest 0.2 per cent dip in the S&P BSE Sensex.

Prices in Bengaluru, the National Capital Region, Hyderabad and Ahmedabad, however, witnessed an uptick during the period.

Liquidity issues post the crisis at DHFL, progress of monsoon, rupee trajectory at the domestic level and oil prices are some factors that will keep markets choppy, analysts say.

The liquidity crisis at Dewan Housing Finance Corporation Limited (DHFL) has dented the fortunes of ace investor Rakesh Jhunjhunwala, who increased his stake in the troubled company in the March 2019 quarter (Q4FY19).

Traditionally, most PSUs have been cash-rich, which added to their value. However, the government has been tapping regularly into their cash resources to boost revenue for the exchequer

The surge in oil prices has also affected the rupee, which hit a 6-week low of 70.25 on Friday against the dollar.

With the frontline Indian benchmark indices trading near all-time highs ahead of the general elections that begin later this week, Marc Faber, Editor and Publisher of "The Gloom, Boom & Doom Report" tells Puneet Wadhwa that the Indian stock market is relatively expensive, especially the index (large-cap) stocks.

There will be pressure on the fiscal situation, especially at a time when the monsoon can also disappoint. More populist expenditure is on cards if the mandate is a hung Parliament or a coalition government.

Even though stocks may remain volatile in the run-up to the polls, as political parties stitch up alliances, the long-term trajectory for the markets remains bullish.

'The probability of another negative year in 2019 is low.'

Analysts caution a non-BJP government is not an impossible scenario. In case of a Modi-led coalition, they advise investors to focus on discretionary consumption, select private banks and financials, RIL, housing, and IT.

The polls are being viewed as a run-up to the general elections scheduled for May 2019 and will test the popularity of the government and its policies amid rising crude oil prices

Even as rising crude oil prices, trade war fears and a sliding rupee cast a shadow on market sentiment, Nischal Maheshwari, chief executive officer for institutional equities and advisory at Centrum Broking, tells Puneet Wadhwa that in the next one year, the outcome of the 2019 general election is a bigger challenge for the market.

The recent three-bank merger seems to be grossly negative for Vijaya Bank and Bank of Baroda in the short term, as the negative net worth of Dena Bank will have to be absorbed by the merged entity

Stretched valuations and slowdown in DII flows are some of the reasons why Goldman Sachs cut its India rating to 'market-weight'

Mark Mobius, co-founder, Mobius Capital Partners, tells Puneet Wadhwa that investors should concentrate more on "value" rather than momentum, and on good small- and medium-sized companies rather than large-caps.

High networth individuals selling stocks to buy real estate is among the key risks for the Indian markets.

Analysts attribute this outperformance to the government's proactive economic reform measures

Rising oil prices, sharp slowdown in mutual fund inflows and steep valuations remain the key risks for Indian investors going ahead.

'The economy needs to deliver the expected 7.5% growth for the markets to deliver better than single digit returns.' 'Any disappointment in growth can see the markets correcting downwards.'

Swati Kulkarni, executive vice-president and fund manager - equities at UTI Mutual Fund tells Puneet Wadhwa that though mid-and small-cap companies are trading at a higher valuation as compared to large-cap peers, one can still find value in select pockets.

The Karnataka election is being seen as the semi-final to the 2019 general elections and appears to be heading towards a close fight

The thrust, they feel, remains on design thinking, AI and digital besides enhanced focus on investing in selling and marketing efforts, expanding local talent base and re-skilling staff

The 'Indian story' will be badly damaged if the Modi government is not re-elected, argues investment banker Christopher Wood.

The best-case scenario -- to which Morgan Stanley attaches 30 per cent probability -- pegs the S&P BSE Sensex at 41,500 levels in the next 12 months.

As markets enter the new financial year and the long-term capital gains tax on the sale of stock investments kicks in, Abhinav Khanna, head of equities, Citi India, tells Puneet Wadhwa that he remains optimistic on the medium-to-long term growth of India, led by consumption recovery and the green shoots visible in the capex cycle.

Nifty could fall to 9,500 levels; not a good time to bottom fish, say experts

Jim Rogers, chairman of Rogers Holdings, tells Puneet Wadhwa that the US bond market that hit bottom in 1981 and has been in a bull-run since then, is coming to an end.

Though most experts remain bullish on the banking space, they suggest investors buy only those banks whose NPAs are at a manageable level of 3% to 4% and there is credit growth or earnings visibility.

Thus far in 2017-18, FIIs and MFs have invested Rs 198.91 billion and Rs 1,119.49 billion in the Indian equity markets. Of this, around Rs 152.46 billion has come in January alone.

'Trust a fund manager, buy some small-cap funds and stay invested.'