As expected, monsoon and economic worries in china dampened the sentiment. Nifty unable to cross the 4700 mark, good amount of selling coming at this level in the last two occasions. So, now the question is we are heading towards the 3900 mark or break the 4700 mark in the near term.
I was repeatedly saying from last couple of weeks that we are in a range between 3900-4850. Of course it is very wide to narrow it then the range would be 4220-4690. Whenever the bad news comes then markets drift towards the lower end of the band vice-versa.
Monsoon in Indian dampened the sentiment!
So, how much it can affect our economy?
Whether we are not bottomed out?
We are going to retest the previous lows?
Still we are in a bear market?
To conclude this, we required to go through the data. In 1988, 2003 we were with severe draught during those years in month of July 71% and 51% rain fall only respectively. In the current year in July we were with 90+% which clearly tell that things are not bad as it was previously. The PM and FM clearly mentioned that we are with sufficient food grains to tackle with the drought. As most of the front line analysts expected this problem can hit 50bp to 100bp to growth means we are going with at least 5.5-6.5% GDP growth. This is not a bad situation when compared with the current global environment. So, this is definitely a bad news but will not derail our growth it will drag the bourses for short term.
As per the data, FIIs not selling hugely in equities and DIIs buying supporting the market. The big two IPO’s pulled out the some money from the secondary which can have impact on the short term. DIIs still sitting with higher cash levels, which can give cushion to the markets.
Conclusion: Now the short term trend is little bearish and those who are having holdings can go for shorting targeting the 4450 levels but one should remember that the medium and long term trend is up.
With thanks
Be and make
1 comment:
The market outlook is fair.
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