The domestic equity market is under tremendous pressure and has been witnessing a massive sell-off in the past few weeks. Domestic equity benchmarks have corrected around 9% in the past month.
The market has closed on a negative note in the last three consecutive sessions and was still trading with more than half percent cuts on Wednesday.
The headline indices closed in the green only on one occasion out of 6 trading sessions this month till May 10. The broader Nifty50 ended marginally higher by 0.03% on May 5 last week.
Although the Indian market has been doing well in comparison to most of its global peers but has corrected significantly recently. As the market continues to hang in the balance.
Experts largely feel that it is not a conducive time to take any aggressive position in the market given the discount it offers. They were of the view that fundamentally sound stocks should be bought in a very limited quantity and cheap stocks in the ongoing market turmoil.
Sustained buying by DIIs and retail investors is imparting resilience to the market even when FPIs continue to be in the sell mode, says V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Today’s market
BSE Sensex and Nifty 50 tanked over one percent in intraday deals on Wednesday, one day before the weekly F&O expiry. The benchmark indices were pulled down on the back of selling in index heavyweights such as Infosys, Reliance Industries Ltd (RIL), ITC, Larsen & Toubro (L&T), and Bajaj Finance among others.
So far in the day, BSE Sensex has hit a day’s low of 53,519.30, while NSE Nifty 50 fell to 15,992.60. Indian stock markets were also seen mirroring global markets. Moreover, stricter COVID-19 lockdown in Shanghai, and the weekly F&O expiry due on Thursday, also added to the woes.
Analysts said that continuous FII selling and weak global cues were also among the major reasons behind the D-Street crash. On the charts, both BSE Sensex and Nifty 50 were ruling below long-term and short-term moving averages, due to which, analysts see more weakness in markets going ahead, where Nifty may tumble down to 15500, and BSE Sensex to 52500.
Expert View
Since the market is a bit oversold, anytime we can see a sharp rebound if global peers see some relief, Sameet Chavan, Chief Analyst –Technical & Derivative, Angel One, said.
Chavan added that below 16000, this year’s March low of 15670 would be the level to watch out for. “For Nifty Bank 33500 is the level to watch if 34000 is breached,” he said.
India is currently in a better position in terms of economic strength compared to its peers and in the medium to long term, the economy facing stocks like banking, infrastructure, capital goods, and housing are poised to outperform other sectors, he says.
“We recommend investors to take advantage of current market falls to buy quality names & fundamentally sound companies,” he adds.
We reiterate our bearish stance on the markets in the absence of any positive trigger, says Ajit Mishra, VP – Research, Religare Broking Ltd.
