The fall has not dampened hopes of market analysts.
The equity market took a sharp beating in post lunch trade triggered by sell-off in option futures. Nifty tumbled below 7750 as fears of further downtrend seized traders. Most heavyweights across sectors — Infosys , ICICI Bank , HDFC and ITC — were witness to largescale sell-off.
Even as the market inched lowered, thereatening to go below 7,750 , it failed to dampen hopes of market analysts. Most say the intensity of the fall was expected partly because of global actions leading to building of shorts and partly due to gains in dollar index.
Analysing the pattern of the fall, SP Tulsian of tulsian.com said most of the stated big names have shaved off 5-6 points each on the Nifty. He says the carnage will continue for two more days and will start recovering from next week. “Market is not working on Wednesday so you will be having three days ahead of the expiry in next week and there I am expecting a very good bounce back.”
Jai Bala of 1857 Advisors too remains optimistic saying as long as Nifty holds 7,591, one can be a bit positive. We need to be focussed on the overall structure in the medium-term. “So the ratio decline from 9,119 to 7,539 has a perfect have a perfect harmonic ratio. I see not more than 200 points on the downside for the Nifty.” He says the reason for being positive in the medium-term is that decline from 9,119 is happening in an overlapping fashion. That is not how a new trend. When a new trend starts, it doesn’t overlap. They fall short of the previous highs or low. So that is not happening.
Deven Choksey of KR Choksey Management says strengthening of the dollar index was a tell tale sign for this fall. “One was always fearing that the dollar index strength could lead to depreciation of the currency. Our currency was less depreciated comparatively but with a fall in the currency value now, I guess some amount of knock out has taken place in some of market.
Choksey says the those counters which are weak on fundamentals, particularly metals, IT etc are facing good amount of headwind. At the same time, banking stocks which recently gained in the rally have also started bear paring the gains. “So, obviously these are the areas where you are seeing the fall and that is where the fall is a little bit sharper compared to the other markets of the world,” he said.