Active Stocks
Fri Dec 08 2023 15:59:53
  1. Tata Steel share price
  2. 129.2 -0.62%
  1. HDFC Bank share price
  2. 1,653.1 1.38%
  1. State Bank Of India share price
  2. 614 0.35%
  1. NTPC share price
  2. 285.25 0.42%
  1. ITC share price
  2. 449.15 -1.95%
Business News/ Markets / Stock Markets/  The short-term market outlook hazy; how should retail investors play in this market?
Back Back

The short-term market outlook hazy; how should retail investors play in this market?

Nifty 50 and Sensex ended September with nearly a 2 per cent gain; the short-term outlook remains hazy with concerns over rates and global economic growth.

Recent trends of the market show gains in the market followed by a fresh wave of selloff. AFP PHOTO/Ralphson DAVID (AFP)Premium
Recent trends of the market show gains in the market followed by a fresh wave of selloff. AFP PHOTO/Ralphson DAVID (AFP)

Nifty 50 and Sensex ended September with a decent gain of about 2 per cent each. Nifty 50 rose almost by a per cent in intraday trade on Friday (September 29) on across-the-board buying. Metal, pharma, oil and gas and banking stocks led the gains.

Nifty 50 closed at 19,638.30, up 115 points, or 0.59 per cent while the Sensex closed at 65,828.41, up 320 points, or 0.49 per cent on Friday.

The Nifty 50 ended the month with a gain of 2 per cent while the Sensex rose 1.5 per cent. The BSE Smallcap index also rose about a per cent. The BSE Midcap index, on the other hand, jumped 3.7 per cent in September.

The market has been rangebound of late on concerns over rates staying longer than expected, sharp gains in the US Treasury yields, dollar, foreign capital outflow and slowing global economic growth.

The long-term view about the market remains strong thanks to India's robust macro outlook. However, the short-term outlook of the market is hazy.

(Exciting news! Mint is now on WhatsApp Channels. Subscribe today by clicking the link and stay updated with the latest financial insights! Click here!)

Short-term outlook of markets

Recent trends of the market show gains in the market followed by a fresh wave of selloff. Experts think this may change in October.

"The ‘sell on rally’ market construct is likely to change in October. October is usually a favourable month both for the US and Indian markets. There are indications that this historical trend may play out this October too," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

"The ‘triple whammy’ of up-trending dollar, US bond yields and Brent crude is showing signs of easing. If this trend continues it will facilitate a recovery in markets. Stability in the US market yesterday also can be a supportive factor," said Vijayakumar.

But the concerns surrounding macroeconomy persist and some experts advise retail investors should be cautious.

Also Read: Stock market rebounds: Is it a relief rally or fresh bull trend — explained with 5 reasons

Manish Chowdhury, Head of Research at StoxBox underscored even though the medium-to-long-term bullish trend of the market remains intact on the back of India’s structural story and strong domestic flows, retail investors should be cautious for the near term.

"The markets at the current juncture look indecisive in the short-term impacted by the triple whammy of rising crude oil prices, depreciating rupee and the events unfolding in the US related to the government shutdown. We would advise market participants to be on the sidelines and wait for decisive moves on either side for fresh entry," said Chowdhury.

Also Read: IT stocks volatile post Accenture earnings; what should investors do?

What should retail investors do?

Experts are positive about the market for the short term and they believe one should buy quality stocks in sectors such as PSU, realty and banking sector.

"Markets look set for a bounce after the recent fall. Investors could sell into the rise a small portion of their holdings where they are sitting on fat profits in a small period of time and raise cash to be deployed in the next weakness. PSU, realty, and power sectors look good for the next few quarters," said Deepak Jasani, Head of Retail Research at HDFC Securities.

Vijayakumar pointed out that FII selling of 25,000 crore this month has pulled down the banking stocks making their valuations attractive. The Q2 results of the banking segment will be good and the market can respond positively to this. This is a safe bet now, said Vijayakumar.

Chowdhury believes that there is still juice left in the banking and automobile sector from a one to two years perspective.

"The banking space, especially selective public sector banks, looks attractive from a valuation perspective and expect strong credit growth and benign credit costs to further aid their performance going ahead," said Chowdhury.

"On the automobile side, we believe that the premiumisation trend is here to continue and we prefer similar plays in the PV (passenger vehicle) and two-wheeler space. With the continuing thrust on capex by both the government and private players, the CV (commercial vehicle) segment also looks interesting from a longer-term perspective," Chowdhury added.

Read all market-related news here

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

Milestone Alert!
Livemint tops charts as the fastest growing news website in the world 🌏 Click here to know more.

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 29 Sep 2023, 02:22 PM IST
Next Story footLogo
Recommended For You

Get the best recommendations on Stocks, Mutual Funds and more based on your Risk profile!

Let’s get started
Switch to the Mint app for fast and personalized news - Get App