Market tanks, but analysts confident of blue skies ahead

Indian equities fell sharply on Monday, snapping Friday's gains, as concerns of Europe's sovereign debt re-surfaced. Tracking a sell-off on Asian bourses, followed by lower-than-street-estimates earnings from engineering bellwether BHEL and gains in the dollar index, investors opted for safer bets over riskier assets.

The Sensex closed shop at 17993.33, down 332.76 points or 1.82% and the Nifty ended at 5383.95, lower by 102.40 points or 1.87%. So, has the hope of market retracement been wiped out? A relatively bullish Ambareesh Baliga, COO of Way2Wealth feels that if the Nifty breaches 5,360 levels decisively (at least between the range of 0.75% and 1%), then it may slip to 5,100 mark. "For now, the possibility of the 50-scrip index breaching those levels is slim, and a bounce back above 5,400 levels is likely,"  he said. However, he pointed out, "A close towards 5,360 would force me to give up on the market for the time being from a trader's point of view as no major news-driven bounce back is expected on Tuesday." Here's how the market faired in today's trade. "Going forward, one can start taking fresh positions around 5,100 levels," he said, adding that in the capital goods space, BHEL and Larsen and Toubro are the top pics. "One can buy the former at current levels; however, wait for some correction to go long in L&T," he added. In addition, Ajit Dayal, director of Quantum AMC feels that going purely on the fundamentals of the Indian economy, there's no reason to be concerned about the long-term prospects of the country's growth. Commenting on the country's largest lender, State Bank of India (after the stock plunged more than 3% in Monday's trade), Dayal insists, this counter has a lot more value in the market today, as against November 2010. Is surging inflation concern still looming over the market? No, fears of inflation are overblown, says Dayal. "Price rise are concerns of the past few quarters and things will look better for India going forward," he stated.