The bulls have finally taken a pause as markets came under intense profit booking and cracked sharply in the session.The markets ended in red taking a breadher after running hard in the past few sessions. Profit booking was seen in scrips across sectors. Realty, capital goods, IT and FMCG stocks were the hardest hit. Markets recorded second highest turnover in history at Rs 122730.99 crore. Selling was seen in frontliners like L&T, ICICI Bank and DLF etc. Cues from Asia were weak as most of the Asia was in red.
On today's trade Ketan Karani, VP, Research at Kotak Securities thinks that some amount of profit booking is kicking in coupled with some sectorial rotation as sectors like banks and capital goods sector are seeing some profit booking. "At some level some profit booking in sectorial rotation is always welcome so we are seeing that kind of market to range bound to lack luster" he says.
Experts think that people should not read too much into today's fall because a 1% or 2% fall after such a huge rally of about 4,000-points in the past one-month was almost expected.
Milind Pradhan, Head of Equities at UTI Securities is however apprehensive on markets. He thinks that if at all the FII investments slowdown, then there might be 2,000 points correction on the Sensex. “If FII money continues to come this way, then may be 500-600 points is enough for me to advice investors to get in again" he says.
Analysts believe that investors who would be getting in at these levels should look at Indian markets purely from long-term point of view and not from sort-term to medium-term point of view.
Prabhat Awasthi, Head of Equity Research at Lehman Brothers has a view that a lot of it is depends on liquidity at this point in time. The speed of the flows has surprised everyone but we are sitting at multiple levels, which are historically the highest compared to the history. "The only thing is that when interest rates change then that level does go up but I think we have pretty much scaled as much as one should have on the back of interest rate cut. So we could be up if the flows remain strong but I would think that at slightly higher levels investors should start getting cautious" he adds.
