Domestic stock markets are expected to open flat on Friday, despite global gloom. Most analysts believe ‘the bottom’ is fast approaching and expect value buying to emerge soon.
According to them, India’s growth story is compelling and despite valuation concern, investors will return to the market soon after this correction.
Siddhartha Khemka, Head—Retail Research, Motilal Oswal Financial Services Ltd, said: “Investors can slowly start accumulating quality stocks on a very selective basis without getting into aggression.”
Ruchit Jain, Lead Research, 5paisa.com, said: “As of now, the trend continues to remain bearish. However the momentum readings on the lower time frame chart has reached the oversold zone and hence, a pullback move could be seen from the short-term supports in the near-term. But until there’s a change in data or the structure, the trend remains bearish.”
Recession worries sink Wall Street
SGX Nifty at 15,380 indicates a flat opening despite adverse global market condition. Overnight, the US stocks plunged sharply. The Dow closed below 30,000-mark, while Nasdaq and S&P-500 slumped 3.5 per cent and 4 per cent, respectively, amid fears of recession. Equities across Asia-Pacific, except China and Hong Kong, are down in early deal on Friday.
Investors are worried as rising interest rates and falling crude oil prices are indicating the world could be heading towards a major economic slowdown as demand falters, said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd.
However, on the domestic front, economic activity remain robust.
Tax collections paint rosy picture
The first instalment of advance tax collection for both corporate and personal income tax has recorded impressive gains, according to initial data. A Businessline report said growth in corporate tax was around 46 per, while personal income tax gains surged over 52 per cent.
"These numbers have come at a time when overall economic growth is being questioned. Also, producers’ inflation, measured by the Wholesale Price Index (WPI), is the highest in nearly four decades," sources in the government told Businessline.
According to Siddhartha Khemka, amidst the absence of any positive trigger and continuous selling by FIIs, "we would suggest caution to traders and advise not carrying any positions overnight given the uncertain market conditions".