InvestorQ : What is your view for the stock markets for Friday 29 January? After the five day correction, do you see further correction or a recovery?
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What is your view for the stock markets for Friday 29 January? After the five day correction, do you see further correction or a recovery?

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diksha shah answered.
5 months ago
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In the last 4 days since the Sensex touched the peak of 50,000, the index has lost 3300 points. Thursday was the fifth consecutive day of market correction and it has lost 6% since then. Most of the fully valued stocks in the market have come off and even the advance / decline ratio has been consistently deep under one.

One good thing in the last couple of days has been that the despite the unwinding pressure on the F&O front, the volatility index or the VIX actually tapered to below the 25 mark. This figure will be the key in the next few days as volatility normally peaks around the Union Budget time before gradually tapering off.

Foreign investors have been the big shift in the last few days as they have tried to book out some profits at 50,00 0 levels of the Sensex. On Thursday FPIs sold a fairly large quantum of Rs.3,713 crore, largely led by Vanguard selling heavyweights. Surprisingly, DFIs offered support with Rs.1,737 crore of buying on Thursday. FPIs were heavy buyers in recent days.

Global cues appear to be relatively better on Friday with some respite from the US markets. The Dow Jones Industrial Average was up 1% while the NASDAQ was also up about 50 bps. European markets, except FTSE, were in the positive. The SGX Nifty is up nearly 120 bps in early trades but Asian cues and pre-budget hints will hold the key.

One major query plaguing the minds of investors is if this correction will sustain for longer. That is hard to say but it must be said that a number of quarterly results in Dec-20 period have not shown the kind of growth expected of them. The performance in September had raised expectations. However, growth seems to be on track and that is the good news.

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