On January 5, the market exhibited turbulent swings during afternoon trading, witnessing the Sensex and Nifty deviate from the day’s high as investors engaged in profit-taking, followed by a comeback.
Chokkalingam G, founder of Equinomics Research, anticipates a further 1-2 percent decline in the market, emphasizing that it will contribute to overall market health. He points to 21,000 as a critical level to watch for Nifty in the upcoming period.
Amit Goel, Co-Founder & Chief Global Strategist at Pace 360, sounded a cautionary note, predicting a potential 10-15 percent correction in the Nifty for the current quarter. He asserts that the benchmark index is not just overvalued but has entered a bubble territory.
As of 2:30 pm, the Sensex edged down by 0.06 percent to 71,811, while the Nifty observed a 0.09 percent decline at 21,639. Both indices retreated from their day’s highs, with the Sensex down by 345 points and Nifty by 110 points. European markets mirrored the decline, driven by investor anxiety over the impending US jobs report, which could influence the US Federal Reserve’s rate cut timeline.
Investors took precautionary profit-booking measures ahead of the December quarter results, as the markets entered an overbought zone. The broader indices, Nifty midcap 100 and Nifty smallcap 100, stabilized.
Chokkalingam G predicts a potential 10 percent decline in the smallcap index in the near term, contributing to the overall health of the markets. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, concurs, suggesting that the valuations in broader markets may not be sustainable for an extended period, anticipating an imminent correction.
Amidst the volatility, technology stocks emerged as the star performers in choppy trade, with the Nifty IT gaining 1 percent, led by TCS, Infosys, and HCL Tech. Other sectoral leaders included auto and realty, while banking and financial services, metals, and pharma stocks faced significant declines.