“Leading private sector banking names, automobile majors and the leading telecom companies are fundamentally strong and fairly valued,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Global cues
One of the key characteristics of the recent dip is how the market was almost entirely dominated by domestic factors (largely the general elections) and there is little sway of global cues which otherwise has a big influence at the moment. Contrary to a crash in the Indian market, US Dow Jones Industrial Average notched a seven-day winning streak on Thursday — its longest since nine days straight of gains
in December as new jobless claims data rekindled hope for Federal Reserve rate cuts later this year. “The market’s decline can be largely attributed to the prevailing uncertainty surrounding the general elections, particularly following the third phase of voting, which witnessed a decrease in voter turnout compared to 2019,” said Arvinder Singh Nanda, Senior VP, of Master Capital Services.
According to Nanda, the outlook for the market this coming week will be guided by the major global and domestic economic data, India’s WPI inflation data and WPI manufacturing data, US PPI data, Core CPI data, Initial Jobless Claims, Core Retail Sales data, Japan’s GDP data, India Q4 company results and speech by Fed Chairman Jerome Powell. Besides the 2% fall in benchmarks, Nifty small-cap and midcap index witnessed a fall of around 5% and 2.75%, respectively. All sectoral indices lost (except Auto and FMCG) on a week-on week basis. Naveen Kulkarni, Chief Investment Officer, Axis Securities PMS, believes that the market correction is a mix of multiple factors and not just driven by political updates.
“At this juncture, we believe that the markets continue to anticipate a stable political regime will ensue…The markets factored in most of the positives from December 2023, so a modest correction seems warranted. This correction is healthy and not primarily driven by pre-election result jitters. Rather, it has more to do with the fundamentals and return expectations for FY25 or 2024, which are getting tapered and becoming more realistic than political jitters,” said Kulkarni.
Market correction (5 sessions)
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Sensex 1.84%
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Nifty 2.32%
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Nifty midcap 2.5%
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Nifty smallcap 5%
