Markets have been trading under pressure since the last nine sessions and lost nearly 2.2 per cent through the last week alone. Rupee weakness continued to be the cause of concern and on top of that the whole issue of National Spot Exchange ltd, further dented the market sentiment dragging it down.
Going forward, Ravi Rastogi from Globe Capital thinks that the only positive trigger in the current market could come in the form of reforms from the Government. “We expect some reforms from the Government which might give some respite to the markets. Also the US Dollar is showing signs of weakness which could be great news for Rupee and markets,” he said.
As far as stocks are concerned, he added, “We expect the selling in madcap shares to stop now as most of them have corrected to multi year lows. We expect a bounce back in the shares after a long correction.” Fortune Fiscal’s Jagdish Thakkar added, “Investor sentiments are hurt and they are trying to sell and get out of their positions as and when they get the opportunity. We expect the banking shares to continue to fall as things don’t look good unless there is some recovery in the currency.”
Further commenting on the Government’s move to expedite foreign direct investments, he said, “It’s too late now to take these steps as the FDIs will now wait for the elections to get over before they will invest in the country. Also the entire Vodafone tax issue has had an adverse impact on foreign investors approach towards the country.”
Ashok Agarwal from Escorts Securities believes that rupee and performance of global markets will decide the direction going forward. “All eyes will be on rupee and how global markets perform. FII movement will also have an impact and we feel that markets look negative. But we do not expect the market to fall much as it already has corrected a lot,” Ashok said.
Fundamental analysts hold a view that going forward markets may fall a little but buying will again pick up at lower levels. Technical analysts though expect the markets to continue trading under pressure. Rajesh Satpute from Mangal Keshav Securities said, “There has been a panic selling by investors as the NSEl news has created nervousness among them and also the continuous weakness in rupee has been a source of concern. Going forward we feel Nifty might even touch the levels of 5500.”
RK Global’s Rakesh Bansal has a similar view that the markets are trading with a negative bias with selling seen across all the sectors and expects the selling might continue. He said in a note, “NSEl default can trigger a panic selling in the market which can take the Nifty down to 5550 levels as well. We have advised investors to stay away especially from the F&O segment.”
AK Prabhakar from Anand Rathi Security said, “5560 is a critical support for nifty and if it breaks it, nifty can fall all the way down to 5450 levels. We are expecting that the information technology shares will continue to perform while some buying might be visible in automobile shares from the lower levels.” He stressed that FII flows have again started to pick up which is the only good sign and if this continues the current fall might be curtailed.