While reports earlier in the week showed steep drops in industrial orders and output, German exports in August too fell the most since January 2009.
Investors in the US bypassed corporate earnings and economic reports to focus on global concerns, including Europe's softening economy. Dipan Mehta, Member of BSE and NSE feels Indian investors too are rattled by larger-scale concerns than earnings. However, if earnings are below street expectations, it may be an added negative element for the market.
According to Mehta, Infosys’ quarterly result tends to drive the technology sector with peers following the trend.
Investors and traders have been slightly overweight on defensives since India-centric businesses such as infrastructure and capital goods related sectors have not delivered. Therefore, we are seeing trade towards export-oriented businesses, he says in an interview with CNBC-TV18’s Reema Tendulkar and Latha Venkatesh.
Furthermore, all the stocks that have performed well over the past 6-12 months are now in a vulnerable position as valuations are not cheap, stocks have gone ahead of the fundamentals and there has been a lack in marginal safety. Investors must be cautious and be prepared for a deeper correction, he adds.
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