Markets Next Week: A Further Downside Likely

Business

oi-Sunil Fernandes

By Sunil Fernandes

Published: Saturday, March 24, 2018, 8:23 [IST]

Markets ended the week lower, with the Nifty breaching the 10,000 points mark for the first time since Oct, 2017. There was carnage across the global markets and the weakish trend may continue into the next week.

Global markets saw a brutal reaction to the US planning to impose tariffs worth $50 billion on China, and the latter retaliating. The Dow Jones itself crashed 1,100 points in two trading days.

With this, the Nifty has now fallen a good 1.6 per cent for the week and more than 10 per cent from its lifetime highs. The markets has now closed at their lowest levels since Dec 5, 2017.

On Friday alone, investors lost a huge Rs 1.57 lakh crores. Even now, the market seems overvalued given that the trailing p/e of Sensex companies is a good 22.50 times.

The markets next week are once again likely to open weak and it is also a truncated week. Thursday and Friday would be a holiday for Mahavir Jayanthi and Good Friday.

Trading would be only until Wednesday, after which we would see trading opening for the new financial year, wherein capital gains tax on shares would apply.

It is expected to be a volatile session of trade next week, though on Monday markets are expected to trade lower, given the way the US markets fell on Friday. In all probability, we would see another sharp downside, after which it is hoped that there could be a recovery in the next few days.

A bounce back from lower levels cannot be ruled out, though for the markets to break those lifetime highs, could be a herculean effort.

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