InvestorQ : Do you think the Nifty has entered correction mode? What is your stock market view for 19 February trading?
Deepa Salunkhe made post

Do you think the Nifty has entered correction mode? What is your stock market view for 19 February trading?

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diksha shah answered.
2 weeks ago
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Over the last days the market has tapered consistently for 3 days in succession. On Thursday, the down trend was repeated and on Friday, the global trends also don’t look too encouraging. As of now, the Nifty has lost nearly 250 points from the peak and the Sensex over 800 points. The A/D ratio continues to remain in favour of the market declines.

However, specific stories are emerging as was the case with hydrocarbon stocks on Thursday. The rally on Thursday was dominated by oil and gas stocks like ONGC, GAIL, Petronet and IGL. This was after the government committed to invest Rs.750,000 crore into oil and gas infrastructure in next five years. Such pockets are surely going to do well.

Notwithstanding the correction in the markets, the FPI buying has been relentless. They were net buyers worth Rs.903 crore on Thursday even as the DFIs sold Rs.1217 crore worth of equities. Even through the correction of last 3 days, FPIs have been net buyers hinting are mere trader unwinding. FPIs have infused Rs.26,000 crore into equities in Feb-21 so far.

Global markets went into correction mode on Thursday after the US jobless claims came in higher than expected. That was a negative surprise even as COVID cases have been rising relentlessly in certain geographies. The correction was seen across the US, Asia, and European markets. SGX Nifty is 35 bps weaker in early trades and could be under pressure.

My quick view is that some pressure is on the cards on Friday being the last day of the trading week and the markets will prefer to stay light over weekends considering the volatile oil situation. However, the focus must be on stocks that could benefit from specific policy initiatives of the government like in oil, gas, telecom etc.

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