Mumbai: In restricted activity, the benchmark Sensex remained range-bound and lost over 66 points in early trade on the Bombay Stock Exchange on Wednesday, on selective selling by funds and general investors.
The BSE-30 share key index, which opened 20.39 points higher, fell back on selling by retailers and recorded a loss of 66.97 points at 12,669.85 in the first five minutes of trade.
Similarly, the wide-based National Stock Exchange's Nifty was down by 19.10 points at 3,664.40.
The major losers, which dragged down the Sensex were Infosys Technologies, TCS, Reliance Industries, ITC Ltd, Satyam Computers, Hero Honda, Larsen and Toubro, Reliance Energy, Dr Reddy's, State Bank of India and BHEL.
Rajesh Agarwal of CD Equisearch says that there has been low participation in the markets because of the holiday mood.
He says, “The participation is quite low now because most of the clients and dealers are on holiday. So actually, there is no participation at all. People are in a holiday mood with the markets closed for two days and again the third day being the settlement day, there is no participation at all.”
He feels that one might see some more correction in the markets. “I feel that markets might take some more correction before taking a new direction and people are waiting for the futures settlement and the Fed meeting. I feel that the rates might be kept unchanged. After the settlement is over, then only I find new entries to be there in the market,” Agarwal adds.
According to Agarwal, one should be long on the market. He states, “The corporate numbers are good, the economy is rolling and I don’t find any reason why there won’t be a higher percentage of allocations in the FII portfolio in the coming times, so I think one should be long.”
He also mentions that the markets will not slide. “There might be some bouts of profit booking or correction, but I won’t say markets will slide because corporate numbers are too good, FII money is coming back and I don’t find any reason why this money won’t come to India when the numbers are so good,” says Agarwal.
Speaking on the retail investors he says that the mood is positive. “Actually, they are waiting on the sidelines for the settlement to be over and the market to take a new direction. Some of them are waiting for the Index to cross 13,000 level decisively, then they will commit new money. But certainly the mood is positive, people are willing to put money but they are waiting for some time,” he opines.
Sajiv Dhawan of JV Capital Services agrees that since a lot of investors are in a holiday mood, there will be no aggressive buying. He says, “There is obviously a lack of participation, I think a lot of people are still in a holiday mood. So there will be no aggressive buying ahead of these couple of days of holiday.”
In his view, the Fed meet will be an important trigger for the markets. “The Fed meet in next couple of days is also very important. I think that’s going to be an important trigger considering that the results have been overall encouraging. Investors and analysts would want to see that the Fed is still pausing and more importantly, it doesn’t seem like it is going to increase interest rates in US over the short-term or the foreseeable future,” he says.
According to Dhawan, short-term traders on the Nifty should be neutral or short. “If you are a short-term trader on the Nifty, I think you should either be neutral or slightly short,” he states.
Moreover Dhawan mentions, “I do not think there is any reason to panic and a correction is very welcome. It is much better to have a 100 points drifting for a day or two rather than a sharp sell of 200-300 points, which would unnerve people and the spoil the sentiment.”
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