Financial Chronicle - - DEEP - FC BUREAU

THE mar­ket's fall by close to 13 per cent since Au­gust 29 peak has re­sulted in all the gains made in 2018 get­ting wiped out as on Thurs­day the bench­mark in­dex, Sensex, closed at 34,001 and Nifty 50 closed at 10,234.65, the lev­els last seen in early Jan­uary.

The ac­cel­er­a­tion in mar­ket fall in Oc­to­ber has shocked mar­ket par­tic­i­pants as it has led to more than Rs 23 lakh crore of share­hold­ers wealth get­ting eroded and looks there is no respite in near fu­ture as the smart pull back on Wed­nes­day gave way to a rude shock on Thurs­day morn­ing.

In­dia has been fac­ing the im­pact of surg­ing crude oil and ru­pee weak­en­ing on its econ­omy which is get­ting re­flected in stock prices of late.

Sar­a­vana Ku­mar, chief in­vest­ment of­fi­cer at LIC Mu­tual Fund said, “Global stock mar­ket cor­rec­tion is putting pres­sure to In­dian mar­ket. In ad­di­tion eq­uity mar­ket has cor­rected due to surg­ing crude oil prices, de­pre­ci­a­tion of the ru­pee and tur­moil in the NBFC sec­tor due to IL&FS cri­sis. Shares of NBFCs has cor­rected due to con­cerns on the tighter liq­uid­ity and af­ter RBI said it would tighten the rules.”

Go­ing for­ward the cues for the mar­ket will be com­ing from the cor­po­rates earn­ings sea­son which has com­menced on a good note with Tata Con­sul­tancy Ser­vices, Band­han Bank and Zee En­ter­tain­ment an­nounc­ing good num­bers.

“In­sti­tu­tional in­vestors will be watch­ing closely on quar­terly fi­nan­cial re­sults and tak­ing calls on the fu­ture di­rec­tion. It is ex­pected, since eq­uity mar­ket has cor­rected at good per­cent­age, se­lec­tive sec­tors would re­cover soon,” said Sar­a­vana Ku­mar.

PSU banks also will be on in­vestors buy­ing list post heavy corrections they have faced as they have shown re­silience in the re­cent mar­ket fall and even dur­ing Thurs­day’s fall.

Sameet Cha­van, chief an­a­lyst-Tech­ni­cal and De­riv­a­tives, An­gel Broking said, “The bank­ing in­dex as well as the midcap in­dex clearly out­per­formed the bench­mark as we did not see these two key in­dices breach­ing their re­cent lows. We con­strue this as a sign of strength and in case of some bounce back move; both these pock­ets would out­per­form the bench­mark in­dex by a fair mar­gin.”

Me­hul Kothari, se­nior tech­ni­cal an­a­lyst-Eq­uity, In­di­aNivesh Se­cu­ri­ties said, “With the ongoing cor­rec­tion in the mar­ket cer­tain pock­ets have started look­ing at­trac­tive. The PSU Banks have been the most un­der­per­form­ing sec­tor of the year 2018. Ma­jor­ity of the stocks in the in­dex are highly over­sold and show­ing signs of ex­haus­tion. Af­ter this un­der­per­for­mance, PSU banks have lately out­per­formed the re­cent crash. We ex­pect some buy­ing in­ter­est in the PSU Banks stocks go­ing ahead.”

He­mang Jani, head-ad­vi­sory, Sharekhan by BNP Paribas said, “We ex­pect buy­ing in­ter­est to re­turn sooner or later, with most qual­ity com­pa­nies cor­rect­ing by 10-25 per cent. We re­main con­struc­tive on qual­ity com­pa­nies in IT ser­vices as de­spite the rally, val­u­a­tions are in-line with long term aver­age mul­ti­ples, se­lec­tive in con­sumer space (pre­fer dis­cre­tionary rather than richly val­ued sta­ples) and pharma (an­other ben­e­fi­ciary of ru­pee de­pre­ci­a­tion).”

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