After the bull's reign,
there appears to be no end to the ongoing bear party on Dalal
Street. The BSE Sensex on Wednesday slipped below the Black
Monday low of 9,826.91. The Sensex was down 200 points on Wednesday.
What is really baffling market analysts
is the kind of impact global factors are having on the Indian
markets. Domestically nothing has changed since May 10, when
the Sensex was ruling at 12,612. The corporate numbers continue
to be good. The GDP numbers are also quite stellar.
But no one is willing to buy this fundamental
story. There is a lack of confidence in the market and the buying
is not coming in even at the lower levels.
Market analyst Rajesh Jain thinks that the
market needs sustained buying to get out of the current rut.
"There is no fresh commitment coming in. People are taking up
opportunistic positions. So there is little commitment left
in the market. At this point, the problem with the market is
the lack of commitment and sustained fund inflows. Sustained
buying is what is required to take the market out of this level,"
Analysts are advising people to stay with
known names in this market. Technical analyst Deepak Mohani
thinks that for those people who have got a nice blue chip portfolio
for several years, there is no reason to dump that.
"There is no reason for people with a long-term
portfolio, and with the blue chip that they have had from 5
or 6 years to get out. They can absorb this decline and get
in into the next bull market," he says
As per Mohani, the trouble is more for those
people who have got into the market in the last one or two months.
He advises them to "book their losses even though they may be
Jaideep Goswami of HDFC Securities, on the
other hand asks people to bide their time and postpone their
"There is a possibility that we would get
better levels. So there is no compelling reason to go and buy
because stocks have corrected now. The broader undertone will
continue to remain bearish," he says.
"We need to see the overwhelming sense of
optimism, which is not yet back. People are basically looking
for profits even now. We may see some buying coming at lower
levels in stocks like Larsen & Toubro or Ashok Leyland or
Maruti Udyog for that matter," he adds.
Clearly, there is a sense of caution and
even analysts are not sure which way the markets would swing
now and what kind of strategy would be effective in these troubled
times. This dilemma is best summed up by T S Harihar of Karvy
"The only strategy that I can think of is
a volatile strategy, where one just takes a bet that the markets
will be volatile. The only thing that I can bet on is volatility.
One can make combination buy calls and puts. Other than that,
it is very difficult to take a directional strategy on this
market," Harihar concludes.
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