With earnings season drawing to a close and the US Fed clarifying on taper, focus will shift to domestic triggers this week. How will the stock markets behave now? Should you start booking profit?
With the better part of the earnings season behind us and the US Federal Reserve’s stance on liquidity and interest rates known, trading in stock markets from here could be bumpy for Dalal Street investors in the near term.
Last week, the BSE Sensex ended Samvat 2077 at 60,068 levels, while the Nifty50 settled at the 17,917 mark. The exchanges conducted the Muhurat Trading session on Thursday evening to usher in the Samvat.
However, red flags are now up on the Street, with analysts advising investors to tread carefully as the markets face multiple headwinds – both from domestic and global factors – which could keep them choppy.
Independent market analyst Ambareesh Baliga said:
Markets will be volatile in the near term
Utilise any bounce-back to partially book profit
Red flags: High oil prices, Fed tapering, reduced liquidity
So which sectors could possibly see a correction? And which ones may present a good buying opportunity? Baliga said:
Use correction to buy: Real Estate, specialty chemicals, pharma
Correction likely in: Auto, Cement, Metals
From a long-term perspective, Motilal Oswal, MD & CEO of Motilal Oswal Financial Services, believes markets have always moved in tandem with earnings growth. And although there would be ups and downs in between, he expects the overall trend of the market to remain positive in Samvat 2078 as well.
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