InvestorQ : What is your market view for trading on 16 December? What does the recovery in markets on Tuesday indicate?
Archita Jajjoo made post

What is your market view for trading on 16 December? What does the recovery in markets on Tuesday indicate?

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diksha shah answered.
6 months ago
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You rightly pointed out about the recovery from lower levels and that was the big story of Tuesday. You would have noted that one point the Sensex was down by 430 points but the index bounced 440 points to close mildly in the positive; led by financials and IT stocks.

Due to the lower inflation reported in November, the FMCG companies came under some pressure due to pricing concerns. That was more of a temporary reaction. Overall, the bounce in the market is a sign that the cyclicals still have a lot of recovery potential built in.

FII action is still positive. On Tuesday, FPIs were net buyers to the tune of Rs.2484 crore while DFIs sold Rs.2667 crore. Till date, FPIs have infused Rs.33,000 crore in December 2020 and this year has already emerged as the best year for flows in the last 25 years.

Global market cues are positive for Wednesday. On Tuesday, the NASDAQ and the Dow were up up by over 125 basis points even as Europe remained in positive territory as the vaccine euphoria was getting built up. Even SGX Nifty is trading 55 bps higher and early trades hint at a positive opening. So these are the positive global cues for markets.

Regarding your query to sell out, that is a tough call to take because the Nifty and Sensex are in uncharted territory and brokers are upgrading it right up to 50,000 on the Sensex. You can at best hedge your long positions with puts and stay long in the market. The bounce is far from over and PSU are now emerging as an interesting story. Make the best of it.

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