InvestorQ : What is your view on the stock markets for Monday 27 January 2021? Will the correction continue in the Sensex and Nifty?
Arusha Ray made post

What is your view on the stock markets for Monday 27 January 2021? Will the correction continue in the Sensex and Nifty?

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diksha shah answered.
2 months ago
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You are right about the correction in the sense that there has been a very rapid and sharp value implosion in the indices. In fact, after the Sensex briefly crossed the 50,100 mark during the previous week, it has been vertically down. The Sensex lost huge chunks of value for 3 days in succession and Wednesday could be a testing time for markets.

The world continues to reel under the US decision to delay the stimulus as that was the big hope for the global markets on spending power. Currently, there are also concerns that the virus may be coming back in a more virulent form in Europe and China. On Monday, Kotak Bank and Ultratech reported encouraging numbers and they may be in action.

Recently, the foreign investors turned net sellers in the market as the pressure built up around psychological levels of the Sensex. FPIs were net sellers to the tune of Rs.765 crore while DFIs sold Rs.388 crore on 25 January. Delay in the US stimulus has been negative but there appears to be some tiring of FPIs after Rs.175,000 crore infused in 3 months.

Global cues on Tuesday were rather mixed with the US markets flat; both on the Dow and the NASDAQ. However, most European markets were up nearly 100 basis points on growth hopes. There was no trading in Indian markets on Tuesday on account of Republic Day but SGX Nifty is 32 bps higher in early trades on Wednesday. VIX near 24 is a worry.

At these levels, one thing the traders need to do is to look for opportunities at lower levels; especially in quality stocks that have given good results but are still correcting. They could present opportunities in a rather tough market.

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