Markets Unlikely To Breach 31,000 Level On The Downside

No one can guess the moods of the market perfectly; however, the recent market correction was expected by most of the market participants. In fact, there is a consensus in the market that the benchmark indices may come down further from their current levels. 

During last fortnight, American markets were on a slightly downward trend with Dow & Jones falling by 0.61 per cent, NASDAQ by 0.49 per cent and S&P 500 sliding by 0.74 per cent.

Taking cues from the US markets, European markets too slipped over the past 15 days. Germany’s DAX fell by 1.9 per cent. CAC 40, the French benchmark index, was the biggest loser declining by 2.11 per cent. Even UK’s FTSE 100 slipped by 0.63 per cent.

However, Asian markets showed a rising trend, gaining over the 15 days gone by. Hang Seng and Shanghai exchanges were the biggest gainers, rising by 2.17 and 3.51 per cent, respectively. As against this, Japan’s Nikkei touched nearly a four-month low after North Korea’s launch of a ballistic missile over its Hokkaido island triggered concerns among traders. 

On the domestic front, FMCG sector was the biggest gainer, rising by 2.61 per cent, followed by metals sector, which rose by 1.86 per cent.

Vishal Sikka’s surprise exit from Infosys led to sharp price correction in Infosys. However, Infosys managed to pull itself up, and thereby also pulled the IT index. The IT index closed down by 1.53 per cent and was the single biggest loser among the indices. Power sector index was the next biggest loser, slipping by 1.49 per cent.

In the last couple of weeks, FIIs have been selling in the market, whereas DIIs have been actively buying. The FIIs have recorded net sales of Rs 12,143 crore. On the other hand, the DIIs have bought to the tune of Rs 9,120 crore in the fifteen days gone by.

Apex Frozen Foods was one of the IPOs that saw good response from investors, with the issue getting oversubscribed by 8.53 times by retail individual investors. Investors can expect to see good listing on the counter and can focus on coming IPOs as well.

While the geopolitical situation cannot be ignored, there is no reason for Indian investors to panic. The South Korean market is doing relatively better than many other global markets, despite it being closer to North Korea. When South Korean investors are not worried, why should Indian investors worry? It may be difficult for markets to breach the 31,000 level in Sensex on the downside.

Going forward, markets may remain slightly weak and may trade directionless after settling down somewhere lower from the current levels. Investors can look at global markets for direction and look out for stock-specific developments to park their money.