Mkts to remain volatile but trade upwards: Experts

Thursday, January 24, 2008

Mkts to remain volatile but trade upwards: Experts


It was an extremely volatile session for markets. They closed deep in the red, after getting off to a robust start. The indices slipped in late trade, despite encouraging global cues. Nifty closed at 5,033, down 170 points, while the Sensex shut shop at 17,222, down 372 points.

Sensex was down nearly 1,000 points from the highs of the day and Nifty down 300 points. The fall came in despite some encouraging cues from Asia and Europe. Asia closed higher and Europe opened in green.

Metal, power and realty stocks have taken it on their chin as they ended deep in red. The breadth was negative, as midcap and smallcap stocks were reeling under pressure. Sensex closed down 372.33 points or 2.12% at 17221.74, and the Nifty down 169.95 points or 3.27% at 5033.45.

Speaking to CNBC-TV18, Amitabh Chakraborty of Religare Securities said that markets will be stable as liquidity has gone out of the system. He added that there will be volatility but markets will slowly return to stability.

“We are looking for stability because the liquidity, that has gone out of the system, will come back. Also, the market had corrected very sharply, so that a lot of people got slightly off guard, when the market fall came because of margin pressure. But those things are already over and currently, the situation is much more stable. Our view is that market will be volatile but will be trading upwards. It would be volatile but slowly it will become stable,” added Chakraborty.

Speaking to CNBC-TV18, Amit Dalal of Amit Nalin Securities said that pain in the markets will remain for a week.

“I am not sure how much more pain is there. In terms of time, the pain will be there for at least a week. I don't think leveraging has felt all the pain of a big fall. It is not able to completely unwind itself. That, in itself, will continue for at least another week. The biggest plus that we have is that a large portion of institutional money has been blocked by the Reliance Power issue. We do have an event in front of us, which will clear liquidity, to buy at lower levels and that will give us a good bottom. I am certain that the bottom we saw on Tuesday will not be violated now,” said Dalal.

Speaking to CNBC-TV18, Rajat Bose of said the problem in the F&O segment needs to be cleared out and if that happens, the consolidation phase will resume.

“Nifty is actually hovering close to its 200-day exponential moving average, which was at 5,068. After today’s close, it would be re-adjusted. 4,915 is a very strong support area. 4,910-4,915 would be roughly corresponding with 50% of the total retracement. This support level is likely to hold. If there is any fall, it might actually go down to the 4,800 level. But having seen such sharp falls, from 1992 to about 2008, in most cases, unless the sector itself is very weak, the low posted in a very sharp fall will not be breached. The problem created in the F&O segment needs to be cleared out. Once that clears out, the consolidation phase will resume. I am not particularly bearish expecting that 4,445 will get broken and the bull market is over,” stated Bose.

Again going down??? Who told market is recovering? Even with help from US, it is not getting better.

Let's hope the experts are right :)

Check here for the rise and fall of market in the last four days.

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