Indian benchmark indices jumped 1.7% on Tuesday and firmly raced up following the long haul of losses last week. The BSE Sensex rose 872 points to 52,469, and the NSE Nifty gained 262 points to 15,610. “Markets were technically in oversold territory and thus witnessed a bounce back, especially in a light market since US markets were closed yesterday. There is an increased perception that by the end of the year, the US Fed will be able to get inflation levels down considerably, which is also helping the markets currently,” said Nishit Master, Portfolio Manager, Axis Securities.
What’s pulling markets up today?
“The market has witnessed a bounce back due to positive sentiment in the global equity markets. After a major correction from 16800 to 15183, the market has witnessed a short-covering rally. However, a major pullback can be expected only above 16000 levels,” said Santosh Meena, Head of Research, Swastika Investmart.
“The Nifty index witnessed a major breakdown after the Fed meet outcome. The global markets have recovered after a steep fall and strong positive momentum has been seen into Dow Jones and Nasdaq. Indian benchmark indices continue its positive momentum for second consecutive trade ahead of global cues,” said Akhilesh Jat, Category Manager – Equity Research, Capital Via..
Where is Nifty headed?
The index faces its first resistance at 15800 levels; post breaking this level Nifty might retest 16,000 levels. “If the Nifty is able to sustain 16000 levels then the next retest levels will be 16400/16700,” Meena added. “We believe that in the short term, Nifty can head towards 15800, but we expect the markets to remain volatile over the next few months,” said Nishit Master.
Should investors buy in the current market?
A long-term investor should use the recent fall to start increasing equity allocation slowly and gradually. “If one is a trader, then I think over the next couple of months, the markets will be sold on a rising kind of a market, and thus one can lighten their trading book at each rise,” Nishit Master said. “Investors can start deploying gradually and use ‘buy on dips’ strategy in the current situation. SIP should be continued, and ongoing correction is a good buying opportunity to deploy more cash for the long term. However, there is an outside risk of a further 10-15℅ correction therefore, going lump sum is not the right strategy in current markets,” said Santosh Meena.
Markets still choppy; watch these index levels
“Choppy movement in the broader market is expected and it is likely to face resistance near 15700 marks and on downside 15000 may act as the key support level. The near-term market trend is weak and we can expect the level of 14700 in near term. One may look for good quality stocks for the long-term perspective and invest in good large caps stocks as it has been that in an inflationary environment large-caps stocks have outperformed,” said Akhilesh Jat.
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