The Indian markets ended a choppy day and a truncated week on a positive note. The Nifty fell as low as 5,856 in intraday, but recovered with strength to end at 5,948 while the Sensex closed 217 points higher.
The broader markets had an equally choppy session with the midcap index ending eventually with gains of 0.4%
Anil Manghnani, Modern Shares & Stock Brokers says, there is still upside left in the market. “I remember the first time it was around 5,700, I expect the market would bounce, but you should sell the bounce as you would get one more test of 5,800-5,700. So, I think since we have done that, this time around we might be on a better footing because what might have happened this time is the fear has got a lot worse. The fear will keep a lot of people out which will continue to pull the market up. I know that sounds odd. But I think what might have happened last time we bounced to 6,000, a lot of people might have bought and then correspondently when you fail, they would have sold again. So, it is a case of once beaten twice shy, you wouldn’t want to come back at 5,900-6,000 levels thinking if I buy again and again it falls to 5,700, I will lose out. So, I think that fear psychosis might help this market,” he explains.
Manghnani further says, “I think maybe not that many shorts in the system. But, yes, shorts have been built up because even yesterday I think for a brief second or few minutes, the Nifty did go into a discount. The premium has been quite shallow over the last couple of days. So, some sort of shorting also will help this market, which has been because of overly long positions over the last month. So, I think this time around moving towards 6,000 might be slightly different from the last time we did so, about two weeks back. So, I would hold my longs, I still feel there is some upside left.”
Sajiv Dhawan, JV Capital Services says, the Nifty will be rangebound over the next couple of weeks. According to him, trading activity will pick up again in the first few weeks of January.
Dhawan says, “The sentiment, I feel, is that things for India still look very positive. If you are a medium-term investor, which means one to two years plus, you are going to look at India very seriously. You are going to buy into that growth story. The December month is generally a holiday period for a lot of investors and a lot of institutions. You might see the Nifty relatively rangebound over the next couple of weeks. There are no more domestic triggers. You have the RBI policy. Investors will look forward to corporate results and based on the advance tax figures, they should be fine.”
Dhawan further says, “I will say that in the first few weeks of January that is probably when the trading activity will pick up again. If you get a sudden gush of inflows from foreign institutional investors (FIIs), even if it if few hundred dollars a day or for few days, confidence will come back and investors will see the 6,200-6,300 sort of levels taken out. But the key for that will be the liquidity flows, valuations are not cheap. The benefit of what you have seen in the Sebi action over the last few weeks will be back. The Nifty stocks, the Sensex stocks which will lead this rally much higher. Midcaps will take a back seat over the next few weeks and it would be the stocks like Tata Motors, TCS, Mahindra across the board anywhere where you will see the serious money still continue to flow despite the higher prices and the higher valuations.”
However, Amit Dalal, Executive Director, Tata Investment Corporation is little cautious. He says, “Two-three big negatives, the market had to contend with the last three weeks, one is of course the political news has been completely overshadowing every event that has come our way. The second is huge shortage of funds which we are seeing in the banking system and the increase in the cost of money. I think that is something that the market I don’t think has yet factored in.”
Dalal further says, “The other perhaps bad news has been is that real estate sector, which had given some hope in the second quarter, has gone back to the shadows which it was reeling under for the last one and one and a half years. So, these three factors I think in terms of political news that has now taken into pricing. But where the cost of money is concerned and the big question over here is why the deposit growth is so low, I think that question needs reconciliation in a far greater manner that what has been yet discussed.”
The broader markets had an equally choppy session with the midcap index ending eventually with gains of 0.4%
Anil Manghnani, Modern Shares & Stock Brokers says, there is still upside left in the market. “I remember the first time it was around 5,700, I expect the market would bounce, but you should sell the bounce as you would get one more test of 5,800-5,700. So, I think since we have done that, this time around we might be on a better footing because what might have happened this time is the fear has got a lot worse. The fear will keep a lot of people out which will continue to pull the market up. I know that sounds odd. But I think what might have happened last time we bounced to 6,000, a lot of people might have bought and then correspondently when you fail, they would have sold again. So, it is a case of once beaten twice shy, you wouldn’t want to come back at 5,900-6,000 levels thinking if I buy again and again it falls to 5,700, I will lose out. So, I think that fear psychosis might help this market,” he explains.
Manghnani further says, “I think maybe not that many shorts in the system. But, yes, shorts have been built up because even yesterday I think for a brief second or few minutes, the Nifty did go into a discount. The premium has been quite shallow over the last couple of days. So, some sort of shorting also will help this market, which has been because of overly long positions over the last month. So, I think this time around moving towards 6,000 might be slightly different from the last time we did so, about two weeks back. So, I would hold my longs, I still feel there is some upside left.”
Sajiv Dhawan, JV Capital Services says, the Nifty will be rangebound over the next couple of weeks. According to him, trading activity will pick up again in the first few weeks of January.
Dhawan says, “The sentiment, I feel, is that things for India still look very positive. If you are a medium-term investor, which means one to two years plus, you are going to look at India very seriously. You are going to buy into that growth story. The December month is generally a holiday period for a lot of investors and a lot of institutions. You might see the Nifty relatively rangebound over the next couple of weeks. There are no more domestic triggers. You have the RBI policy. Investors will look forward to corporate results and based on the advance tax figures, they should be fine.”
Dhawan further says, “I will say that in the first few weeks of January that is probably when the trading activity will pick up again. If you get a sudden gush of inflows from foreign institutional investors (FIIs), even if it if few hundred dollars a day or for few days, confidence will come back and investors will see the 6,200-6,300 sort of levels taken out. But the key for that will be the liquidity flows, valuations are not cheap. The benefit of what you have seen in the Sebi action over the last few weeks will be back. The Nifty stocks, the Sensex stocks which will lead this rally much higher. Midcaps will take a back seat over the next few weeks and it would be the stocks like Tata Motors, TCS, Mahindra across the board anywhere where you will see the serious money still continue to flow despite the higher prices and the higher valuations.”
However, Amit Dalal, Executive Director, Tata Investment Corporation is little cautious. He says, “Two-three big negatives, the market had to contend with the last three weeks, one is of course the political news has been completely overshadowing every event that has come our way. The second is huge shortage of funds which we are seeing in the banking system and the increase in the cost of money. I think that is something that the market I don’t think has yet factored in.”
Dalal further says, “The other perhaps bad news has been is that real estate sector, which had given some hope in the second quarter, has gone back to the shadows which it was reeling under for the last one and one and a half years. So, these three factors I think in terms of political news that has now taken into pricing. But where the cost of money is concerned and the big question over here is why the deposit growth is so low, I think that question needs reconciliation in a far greater manner that what has been yet discussed.”
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