Domestic markets are likely to witness a bears’ onslaught on Thursday, as global markets continue to remain under pressure. Both institutional investors -- foreign portfolio investors and domestic institutions -- were sellers for second straight stay on the domestic bourses, indicating their concern on valuation of Indian equities, said analysts. They expect the selling to continue for Indian markets, at least by FPIs for some more time, due to steepened US treasury yields.

Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services, said: “Global markets continued to see sell-off as US treasury yield surged to almost two-year higher. Investor-sentiments were weighed by the likelihood of a tighter monetary policy to curb inflation across the globe.

SGX NIfty at 17,901 (at 730 am IST) indicates a nearly 75 points gap down opening for Nifty, as Nifty futures on Wednesday closed at 17,974. However, equities across Asia-Pacific region are trading flat in early deal on Thursday. Overnight, US stocks slumped about one per cent, after opening on a positive note.

‘Buy at every dip’

However, analysts are betting on Indian long story and advise investors to accumulate 'quality' stocks at every dip.

"This correction will relieve the overbought momentum set-ups which should be a good sign for the next leg of the rally," said Ruchit Jain, Lead Research, 5paisa.com. "Also, the VIX has not seen any alarming signs inspite of the correction in the market. Hence, the downside seems to be limited and one should start looking for buying opportunities again," he said and added: "The relative strength in the banking index indicates that this sector will continue its leadership and thus, short term traders can look for stock-specific buying opportunities from this space."

According to Khemka, going ahead, the market is likely to continue with its consolidation till the inflation fear looms. “Also, major events like upcoming Budget and various State elections could lead to higher volatility in coming days. “Hence, we advise trader to be cautious and remain stock and sector selective. Investors can use dip in the market as an opportunity to accumulate quality stocks for long term portfolio,” he added.

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