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Super run but fundamentals still shaky, don’t buy: Experts

Experts watching Tuesday’s sudden rally say only pockets of market has caught the momentum which makes it difficult to take a call on the Nifty.

The News International Team

The bull market euphoria, which is across sector, is still missing. Experts watching Tuesday’s sudden rally say only pockets of market is experiencing the momentum which makes it difficult to take a call on the Nifty.

Nifty surpassed  8700, its all-time high, shortly before shutting shop on Tuesday. Both Sensex and Nifty settled for a record close. Midcap index too finished off at a new high.

But Sajay Dutt of Quantum securities is not convinced. He says one must not overlook the fact that fundamentals, earnings and balance sheet issues of domestic companies haven’t gone away. “It will take time to set right but I feel the prices and the indices obviously have run up ahead of the fundamentals. However, that is what bull markets are all about. When the momentum sets in it just takes off. Same thing happens when bull markets turn into bear markets.”

Just as Dutt, Vineet Bhatnagar, MD, Phillip Capital prefers to remain in the wait and watch mode. While we are making higher bottoms and higher tops, 8800 has become a a very important resistance leve, he says. “So, while it is good as a celebratory moment to look at a new high, I would like to keep my eyes fixed on a channel which I think is bringing a strong resistance at 8800.”

However, Dutt reiterated his faith in government’s reforms measures but chose to wait for Finance minister Arun Jaitley’s Budget speech to take a call on macros. He admits he was caught in the wrong foot for being bearish. “I did not expect the market to rally so strongly with the events of what has been happening across the world. The RBI action has kind of ignored all other indicators  — the volatility coming out of uncertainty in China, the European problems, the oil issue as well as Russia.”

Technical experts Sudarshan Sukhani is convinced that the rapid 300 move on the Nifty to record high has come very fast and hence advises not to venture out with a buy-basket. “There is no doubt Nifty will concolidate, book your profits.”

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