After opening with marginal gains, domestic benchmark indices — S&P BSE Sensex and NSE Nifty50 slipped into negative territory on January 8. The retail exuberance faded after a strong US jobs report reignited a rally in 10-year treasury yields, pushing back rate cut prospects.
At close, BSE Sensex and NSE Nifty50 slipped up to 1 percent to 71,355 and 21,511 levels, respectively. Broader markets, too, saw profit-booking as Nifty Midcap 100 and Nifty Smallcap 100 indices slipped 1 percent each. As a result, the fear gauge — India VIX — edged up by 7 percent to hover around 13.5 levels.
However, market watchers believe that the inherent strength in overall markets is intact, predicting that the 22,000-mark for Nifty is possible in the next few sessions.
"Once Nifty crosses the 21,750-barrier, 22,000 will be eyed by investors," told Rajesh Palviya, Head - Technical & Derivative Research at Axis Securities to Moneycontrol.
Analysts at ICICI Securities, too, reiterated their positive bias of Nifty heading towards 22,000 in coming weeks. "In the process, bouts of volatility would prevail amid the onset of Q3 earnings season," they wrote.
The key point to highlight here is that any intermediate corrections since the end of October 2023 have been limited to the tune of 3 percent while time-wise index has not given any negative close for more than 2-3 consecutive sessions, underlining inherent strength, said analysts.
"Any breather should be capitalised to accumulate quality stocks as Nifty is expected to hold the key support threshold of 21,300," added analysts at ICICI Securities.
Some triggers that will shape market movement are inflation data, bank loan growth, and deposit growth. Apart from that, the Q3 earnings season will kickstart from January 11, with tech major Infosys reporting its quarterly figures first. Later, TCS, HCL Tech, and Wipro will join the result bandwagon as well.
Also read: Kings of consistency: Nifty stocks which have regularly outdone the benchmark
"While short-term fluctuations may affect Indian markets mid-week, long-term investors can capitalise on stock watchlists, finding opportunities at discounted intrinsic values," advised Vikas Gupta, CEO and Chief Investment Strategist at OmniScience Capital.
Sectorally, PSU Banks, FMCG, IT and Pharma indices were the worst performers, declining up to 2 percent. On the contrary, Media and Realty indices bucked the trend.
Overall, analysts believe that profit-booking by domestic investors and a seasonally weak January may impact any spring in rally. Meanwhile, globally, concerns over rate cut delays are expected to dominate investors' sentiment. A pushback may worsen trade sentiment, triggering a fall.
"The market will be disappointed if the rate cut doesn’t happen in March," said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
