Shillong, August 14: The market sentiment has taken a negative turn with the dollar index surging to 103 and the US 10-year bond yield climbing to 4.18.
These developments are discouraging capital flows into emerging markets. Last Friday’s Foreign Portfolio Investor (FPI) sell-off of Rs 3,073 crore aligns with these unfavorable trends, according to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
As per IANS, the recent performance of the Bank Nifty has exerted pressure on the markets over multiple trading days. The Reserve Bank of India’s decision to increase the Cash Reserve Ratio (CRR) for banks, aiming to counterbalance the excess liquidity resulting from the withdrawal of Rs 2000 notes, has further contributed to negative sentiments in the banking sector, Vijayakumar noted.
Nevertheless, leading banking stocks present appealing opportunities for bargain purchases during market corrections. The sector’s fundamentals remain robust, and valuations are reasonable.
For the near term, investors are advised to exercise caution and await market consolidation, Vijayakumar advised.
Anand James, Chief Market Strategist at Geojit Financial Services, provided insights into the Nifty outlook. He observed that buyers seem to be stepping back, anticipating more significant declines. Key support levels are identified at 19258, 19060, and 18900. The potential for an uptrend revival hinges on whether 19400 can attract bargain buying, as it has retraced 61.8% of the rise since August 3rd.
As of Monday morning, the BSE Sensex has declined by 290 points, reaching 65032. JSW Steel has experienced a more than 3% drop, while SBI, Tata Steel, and Bajaj Finserv have all decreased by over 2%.
