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According to market experts, aggressive rate hikes by the US Federal Reserve and Reserve Bank of India (RBI) to curb inflation have prompted bearish fears and impacted equities.
With the rise in US rates, there is also a huge possibility that other than the equity market Market Like in the debt and bond markets too, some FII outflows can be seen in India soon. Ravi SinghVice President and Head of Research, ShareIndia.
“In this speed, nifty We may continue the sell-off and touch 14,800 level in the coming trading days.”
Geopolitical tensions, global recovery, rising commodity prices, disrupted supply chains, FII outflows, high inflation and a weak rupee are among the major reasons that have led to sharp asset erosion in the markets in the recent past.
According to Singh, both the indices may show some correction around their first support. “However, this will not be sustainable,” he warned.
The support level for Nifty 50 is 15,100 and then 14,800, while 15,600 and 15,800 will act as resistance levels. On the other hand, 32,200 and 31,700 are support areas for Nifty Bank, with resistance at 33,450 and 34.200, Singh said.
Index heavyweights, including metals, IT and financials, have been the weakest. Most of the sectoral indices have turned sharply down, breaking their lows in the previous year.
“Supply disruption due to rising inflation numbers due to Ukraine-Russia war is impacting metal prices, impacting operating margins and profit growth, putting metals under counter pressure,” said ShareIndia’s head of research.
“IT stocks are witnessing selling pressure as margins have declined due to supply side pressure,” he said. “The combination, high inflation, high rates and FII selling has pushed the banking sector to its worst performance ever.”
However, he is suggesting some areas to look for price in the current times. He said one can look at the FMCG, IT and gas sectors from a long-term investment perspective.
Dabur,
, , , , Bharat Electronics, IEX, and more are at attractive levels for the long run.
He also gave a brief suggestion
(jobs), , and the current market doldrums.
Market watchers say the benchmark indices are showing no signs of recovery anytime soon and any trend rebound is not sustainable. In this scenario investors should follow a wait and watch strategy.
Investors can invest 40 per cent of their investments at current levels, while the remaining 60 per cent can be invested at 14,800 levels. “Current investors can wait for lower levels to average their positions,” suggests Singh of ShareIndia.
Market participants suggest that long term investors should stick to strong fundamentals and not worry about short term volatility.
In the second rung counters, Singh sees a good opportunity for investors to make money. “Adani Power,
Ambuja Cement, IEX, MCX and BSE are some of the stocks for good returns.
(Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. They do not represent the views of The Economic Times)
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