InvestorQ : What is your view for the Sensex and Nifty on 18 February after the sharp correction on Wednesday? Do you see a bounce or further correction on Thursday?
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What is your view for the Sensex and Nifty on 18 February after the sharp correction on Wednesday? Do you see a bounce or further correction on Thursday?

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diksha shah answered.
2 months ago
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At the outset let me tell you that we have a correction of about 100 points on the Nifty on Wednesday, which is hardly after the Nifty has rallied nearly 20% in the last 3 months since Biden first won the US elections. Hence, we need not read too much into this small correction as there are no negative trends as of now.

On Wednesday, the Nifty corrected over 100 points and this was led by some profit booking in select FMCG companies like Nestle. Some other market leaders like Maruti and HDFC Bank that had rallied sharply in last few weeks have also given up some of their gains. Of course, the A/D ratio was firmly in the negative zone.

Now let me tell you why there may not be much to worry about markets right now. Two trends were seen clearly on Wednesday. Despite the fall in the broad indices, the mid cap and small cap indices were actually in the positive. Also, the VIX retreated to 21 levels, which is a good sign and hints that investors are still likely to buy in on dips.

The interest from the global buyers is almost unrelenting. FPIs were net buyers to the extent of Rs.1008 crore while DFIs sold Rs.1283 crore on Wednesday. FPIs have infused nearly Rs.25,000 crore into equities since the Union Budget announcement hit two birds with one stone by being transparent on the fiscal deficit and not relenting on reforms process.

Global markets continue to be mixed, but the FOMC minutes did hint that growth in the US was not exactly picking up. Dow remained in positive territory on Wednesday, but other global markets like NASDAQ, FTSE, DAX and CAC remained under pressure. SGX Nifty is showing gains in early trades on Thursday, but Asia could hold the key.

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