Sensex, Nifty brace for renewed pressure amid low volumes
Domestic markets are likely to come under renewed pressure on Wednesday. Analysts expect volumes to be low due to festivity mood. Selling by foreign portfolio investors will continue in the short term though value buying them in some counters is not ruled out, they added. Both domestic and foreign institutional investors will adopt sector and stocks’ rotation strategy give the current valuation, analysts further added.
Analysts see a lacklustre movement in the market in the short term. Market is showing strength and Nifty 50 is sustaining above 20K levels, said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd
“Overall, we expect the market to gradually inch upwards with minor profit booking at intervals. Besides, weakness in Chinese market may help flow into Indian stocks,” he added.
Gift City at 20,080 indicates a gap down opening for domestic markets.
However, analysts expect outflow from Chinese market is likely to enter Indian shore.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said:
“Shanghai composite is the worst performing large market if we take the near term and the long-term. The index is flat not only for the year but for the last 16-year period also. Shanghai composite is now at 3126, the same level as in March 2007. This is terrible long-term performance. The disappointment with China is only increasing.”
With declining population, decelerating economy, political tensions with the West and anti-business economic policies, the prospects of the Chinese market look dim. That’s why FPIs are following an ‘avoid China’ policy,” he said adding “this is certainly good for India.”
Increasing outflows from China and inflows into India are clear inevitable long-term trends. But in the short run high valuations in India and rising bond yields in the US will pose challenges to this trend, he cautioned.