The week ends with a disappointment over the index with the markets closing at about 4.5% lower than its previous week. With the weak global scenario the south bound direction adopted by the Index is here to stay and experts expect a further correction with the last week of September to start.
The very important resistance level of 4900 was broken today which has given indication that NSE might further test the lows of 4700 levels.
The volatility is here to stay as per many experts and if some other bad news creeps in the weak sentiments may further bring the markets to lower levels. In case the index comes down and the bond yields remain to stay steady and does not go up due to heightened risk aversion a convergence in earnings in bond yields can be witnessed.
If that happen a rally in the next stage can be the way for the index. The downfall has made many people remember the 2008 debacle over the Index. On the other hand many see this as a time for buying value stocks which could have high potential to grow when the market takes a U turn.
Also this is not the time to make a defensive portfolio but it’s the time for finding value between the down sectors which can recover with the interest rate scenario and inflation becomes more favorable.
Bell the Bull says: The markets are surely going southwards but for many long term investors this can be a huge buying opportunity for accumulating more stocks.