Experts expect mkts to bounce back, advice buy on dips

The markets showed resilience today and surged in the eleventh hour after a tepid day of trade. For most of the day, the Nifty gyrated between 4,950 and 5,000 levels, but managed to end the day above the 5000 mark. India performed much better than its Asian peers. At closing bell, the Nifty was up 50 points while the Sensex surged 170 points.

Speaking on today's trade, Mitesh Thacker, Technical Analyst, miteshthacker.com, said the Nifty tried to take out 5,000 levels two-three times during the course of the day but failed to sustain above that. "After breaking down with such large force yesterday, it is important that these technical levels recapture as fast as possible. In case we do not get close above 5,010 over the next 3--5 days, then it could be negative. The weight of averages would probably come into play and you would see a re-test of recent lows or probably even lower levels."

Road ahead for markets:
Experts feel the effect of the global crisis can be a good buying opportunity in India as the markets will bounce back eventually after some volatility. Dharmesh Dalal of Antique Stock Broking said India is trading in line with what is happening in the markets. "We have to be in tandem for a short while considering what plays out in the international markets. But we will bounce back that's for sure."


He advises investors to adopt a buying on dips strategy. "I would utilize every dip to buy. Each bad news in the international market provides a good opportunity to add. I would be a cautious buyer and wouldn't be investing the entire money that I have. I would be keeping cash not knowing whether I will get a better opportunity tomorrow again."

Rahul Chadha of Mirae Asset Management too sees the markets correcting in the near-term on global concerns. "The markets would remain volatile for the next couple of months. What we have seen over the last 15 months is strong cyclical recovery and sovereign debt concerns. What we used to talk about has now come to the forefront. We believe that this crisis remains confined to southern Europe. But with sovereign debt concerns, we will see the developed world growing below trend levels of growth and hence we will continue to see a near-term correction in the markets."

Krishna Kumar Karwa, MD, Emkay Global Financial Services, said global concerns remain and we will still see them panning out. "The domestic economy is doing very well and we have projections of almost 8.5% GDP growth. We have seen the kind of robust auto numbers which have come out for May. So, the domestic economy is doing phenomenally well. The question is what about global concerns on eurozone, China, and a possible slowdown in the US. Valuations being where it is, there is hardly any upside on current prices. What we are seeing is a rangebound market with 5,400 being the top and 4,700 on the downside. So, we are in a consolidation kind of a phase."

Courtesy:moneycontrol.com