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Last Updated : Sep 22, 2015 10:41 PM IST | Source: Moneycontrol.com

Sell-off: Expiry week syndrome or something more sinister?

After major European indices started to sell-off, Indian equities that started off confidently, joined the bandwagon slipping below 7900 in less than an hour.

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Moneycontrol Bureau

After major European indices started to sell-off, Indian equities that began the day confidently, joined the bandwagon by breaking the crucial 7800 mark in less than an hour. The problem for the market compounded on account of it being in the expiry week. The Dow Futures indicated there could be more pain in the offing as it lost more than 200 points intraday.

Blue chips like HDFC, Reliance Industries, HDFC Bank and L&T were notable losers. Bank Nifty gave up 2.5 percent. 

Jai Bala of 1857 Advisors is not surprised by the ferocity of the fall. "I was saying the market has to print 8093 to indicate that the bottom is in and I wanted it to print before September 18. That hasn’t happened so the market is telling us that there is one final low that is pending for the correction to complete." He says that final low will be somewhere around 7480 on the Nifty. "So the market has probably started its final descent of this correction."

Rubbishing all's-well-with-India view, Siddharth Bhamre of Angel Broking said this remains a sell-on rise market. Short-covering rally can remain elusive for a while and advises investors to remain guarded. He thinks 7900 is technically the support level for Nifty. Fundamental expert Dipan Mehta says if earnings disppoint in this quarter, then we can be in bear market. "A lot of course depends on the Reserve Bank commentary," he said.

About the ferociousness of the fall globally, Robert Parker said there must be something that Fed is doing which is confusing the markets. Besides, there still ongoing confusion in the market about what the Fed has done. "We now have four statements from Fed governor saying they are highly confident that US interest rates will rise by the end of the year." 

However, he remains optimistic on India saying it is one of the major beneficiaries of soft commodity prices. Ambareesh Baliga, too sees the fall as an opportunity "as long as we don't break 7750-7800 levels."

First Published on Sep 22, 2015 03:26 pm