K. ARAVIND
The past week has seen the stock market undergo a strong correction. For the first time since the Nifty returned from the 7,500 level, the stock market faced a strong correction. The Nifty corrected close to 11,800, down a thousand points.
The decline in global equity markets was also reflected in the Indian market. One of the reasons for the sudden decline in the market is the news that some European countries are moving to reintroduce lockdowns in the face of increasing number of COVID-19 patients. Uncertainty in the US presidential election is also a factor that has adversely affected the market. There is complete uncertainty as to who will win the November elections.
The Nifty is likely to trade between 10,000 and 12,000 until the economy recovers. The technical charts also indicate that such a situation is likely to exist.
If the decline continues, the key support level will be at 10,800. If it breaks 10,800, the next support will be at 10,150. If the market rises, there will be strong pressure at 11,377. Subsequent pressures are at 11,377 and 11,800 levels.
Investors are approaching the market with caution in view of the circumstances under which the Supreme Court on September 28 considered the petition seeking waiver of interest during the moratorium period. If there is a court ruling that goes against the interests of the banks, the selling pressure on the shares will increase.
In the present situation it is advisable to use the opportunity available in the correction to buy in stages. In the downturn, buying shares in the IT, pharma and FMCG sectors will further strengthen the portfolio.
