It was yet another week of losses as both the benchmarks Sensex and Nifty plunged 2.7-2.8 percent from last week’s closing levels. Second line shares fared worse than their large cap counterparts, with the BSE midcap index and BSE small-cap shedding 4 percent and 5.6 percent respectively.
Just as market was reconciling to the prospect of a rate hike in the US, air strikes on Yemeni rebels caused crude prices to surge. Investors are worried that continuing strife in the Middle East could push crude oil prices up further.
Experts advice short-term traders to sell on rallies as the near-term trend looks bearish, but an opportunity presents itself for medium to long-term investors as valuations have turned attractive after the recent sell-off.
“It would be a good time to start looking at things to buy. I am not saying that we will have a “V” shaped rebound but at least the major part of the sell-off is done with,” said Sanjay Dutt of Quantum Securities in an interview to CNBC-TV18. He expects some more correction ahead.
With today’s decline, the Nifty has dropped 777 points from its record high seen earlier this month. Banking stocks led the fall; Bank Nifty is down almost 13 percent while CNX PSU Bank index has scrapped a massive 20 percent from the top. ICICI Bank, L&T, Reliance Inds, ITC, HDFC, HDFC Bank and TCS are down between 9-15 percent since then.
“To let off companies that are fundamentally good, they are available at a discounted valuation right now, so certainly it makes a point case to basically buy into some of them and we do buy quality stocks in the portfolio in this particular call,” said Deven Choksey of KR Choksey Securities.
It will be a calibrated up-move in markets with limited upside so experts suggest investors to be extra cautious while selecting stocks.
Chandap Taparia, Sr Derivative analyst at Anand Rathi says option data suggest Nifty will have a broad range of 8200 to 8600 in the April series. He says Centurytex, Siemens, Ashok Leyland, UPL and Yes Bank look strong on the charts. He sees weakness to persist in PSU Banks, metals and mining stocks. He sees buying interest coming back if Nifty is able to sustain 8450-8500 levels, then market might rally to 8626-8669.