Sensex Slumps 561 Points, Nifty Wipes Out 2018 Gain on Global equity sell off.
Markets recovered partially by close on Tuesday with the S&P BSE Sensex ending at 34,195 levels, down 561 points. The 30-share index recovered over 600 points in intra-day deals after opening 1227 points lower. The fall comes on the back of a spike in bonds yields. Overnight, US markets had suffered their biggest loss in over six years. Back home, investors were also wary ahead of the outcome of the RBI’s monetary policy review on Wednesday.
Losses in today’s session wiped out over Rs 2 lakh crore from the market value of the Indian benchmarks. At an industry event, Finance ministry sought to assuage investor concerns and said the sell-off in equity markets was due to a weak global sentiment and not because of long-term capital gains tax re- introduced after 14 years.
On any other day, a lower close by NSE Nifty 160 points would be cause for despair among the bulls. Today, after the early morning shock of 400 points, the 160 point loss at close appeared to be gift to bulls. Today all the sectoral indices closed in loss led by IT and PHARMA.
Remember one thing, VOLATILITY MARKET ARE NOT BULLISH; stay away from volatile markets which are impossible to trade. Money is made in sustained trends.
Going into trade on Wednesday, we can still expect some modest negativity in the initial trade. However, the levels of 10,450 and 10,375 will play out as major support, unless something drastically goes wrong with the global market overnight. On the higher sides, market may find resistance at 10,545 and 10,610 zones.
In past, whenever there have been such synchronized global correction, they have remained short lived. While they last, the domestic market has typically decoupled itself, while attempting to outperform peers on a relative basis. At this juncture, we would like to reiterate that this is nothing but a bull market correction and the primary uptrend still remain in place.
Dow Swings Sharply, Finishes 2.3% Higher on Tuesday. The blue-chip index changed direction 29 times over the course of the session before surging in the final hour to close up 567.02 points, or 2.3%, at 24912.77. The index swung 1,167.49 points from its high to its low on Tuesday. That marked the second-biggest intraday trading range in the Dow’s history. The largest: Monday’s 1,596.65-point swing that ended with the index closing down 1,175.21 points. Government bonds strengthened for a second day, with the yield on the benchmark 10-year U.S. Treasury note falling to 2.766% from 2.794% Monday.
We strongly recommend utilizing all such opportunity to make portfolio purchases. Traders are advised to preserve cash and also make some modest selective purchases at lower levels.Let us take a look at steps an investor should take in these periods of downturn.
Do not panic from market sentiments : While investing in the market, patience is the key.
Stick to your financial goals : Be disciplined and rational, and ignore emotional-driven decisions.
Stay invested for a longer-run : Remember that market volatility is a blessing for Quality Companies you can buy stocks at cheaper price.
Apply right investment strategy : Do not panic! Markets will go up and down depending on the various factors. For investors who are into direct equity investments, it is important to stick to large and high-quality stocks.
Review your portfolio : Reviewing your portfolio should be a must in such times of ups and downs in market sentiments. It helps you understand the progress you made towards your goals analyzing the past performance.
* This material is for information purposes only and should not be constructed as an offer or solicitation of an offer to buy or sell any securities.