Moneycontrol
Dec 06, 2017 05:12 PM IST | Source: CNBC-TV18

Correction in line with global markets; keenly eyeing Guj election outcome: Experts

Ajay Srivastava, Dimensions Corporate Finance Services says the body language of the RBI governor was not talking of an economy which is on a strong footing.

CNBC TV18 @moneycontrolcom

The market on Wednesday closed lower on back of weak global cues and after the Reserve Bank of India kept the key policy rates unchanged with an eye on inflationary pressure.

The 30-share BSE Sensex was down 205.26 points at 32,597.18 and the 50-share NSE Nifty fell 74.20 points to 10,044.10 while the Nifty Bank plunged 273 points.

The six-member Monetary Policy Committee (MPC), headed by RBI Governor Urjit Patel Wednesday kept its key lending rate—the repo rate—unchanged at 6 percent, but warned about lurking inflation worries in the new year, amid signs that costlier food and fuel prices could pinch household budgets.

Ashwani Gujral of ashwanigujral.com says the correction has nothing to do with the RBI monetary policy decision because that was on the expected line but it is more in line with the global correction.

Breaking of 10,100, shows market has started expansion on the downside, says Gujral.

Ajay Srivastava, Dimensions Corporate Finance Services says the body language of the RBI governor was not talking of an economy which is on a strong footing. They were concerned about inflation and there was no comfort on the yields front too, therefore market sold off.

He also think, the market was already weak going into the event and more so because of uncertainty of Gujarat election outcome.

Talking about his view on NBFCs from now on, Srivastava says they have negative on the companies that are into lending because their share is going down while competition is increasing and moreover, they are not able to borrow at a much better price when compared to banks and other institutions. However, he is positive on the companies that have fee based income.

Therefore, market volatility is here to stay, yields and returns on mutual funds are not guaranteed anymore, says Srivastava.

Moreover, in the last week, 10 days there was no major buying across the board barring few stocks and that too was restricted to infrastructure stocks, says Srivastava, adding that there was no support seen for the mainline stocks.

However, if one were to look at the brighter side of this correction, then it is an opportunity for people who have missed to invest.

According to Srivastava, from now till the 18th, Gujarat Election outcome, one will neither see major buying nor selling. Indian investors will stay put and globally, investors will be on holiday.

In the same interview, other market experts Mitessh Thakkar of mitesshthakkar.com  SP Tulsian of sptulsian.com also shared their views on specific stocks.
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