Indian markets opened in the green today but selling pressure soon emerged amid weak Asian equities. The Sensex was down over 200 points to 45,337 after rising to 45,938 in early trade. Nifty was down 0.4% to 13,272, extending Monday’s sharp selloff. The broader markets were under severe pressure with BSE midcap and smallcap indices down about 1.3% and 2% respectively.
Some analysts suggest investors avoid risky trades in either side until a direction emerges.
“The index opened in the green but is unable to sustain; the breaking of 13500 yesterday has happened on the back of very high volumes. That being said, traders should not take an unnecessary risk by investing in long or short trades. We are at a precarious juncture and the markets would take a few sessions to stabilize before a direction emerges,” said Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments.
In the previous session, Sensex plunged 1,406.73 points or 3%, its biggest single-day fall since May 4. Foreign portfolio investors (FPIs) turned net sellers in the capital market on Monday as they sold shares worth ₹323.55 crore on a net basis.
“This correction seems more like a typical bull market correction, which could continue to be there for a while. Nifty is expected to decline further towards 12750-12800 support,” HDFC Securities said in a note.
VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services says investors who have cash can deploy some part to buy quality stocks.
“A point repeatedly emphasized has been the vulnerability of the market at high valuations. When the market runs up too much too fast a crash like what happened on Monday becomes inevitable. Those investors who have increased the cash component in their portfolios can consider buying into top quality IT and financials for medium-term appreciation. The concerns regarding the new strain of the virus seems a bit exaggerated. But further lockdowns in the West can impact the expected growth recovery,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Among the Sensex stocks, ITC, Bajaj Finance and SBI were down over 1% today. Asian stocks dipped today after US equities joined a global decline as a new variant of the coronavirus in the UK and a wave of lockdowns and travel restrictions hurt sentiment.
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