Global markets fell last week and Indian markets followed, with worries over a second wave of Covid 19 cases. The S&P CNX Nifty ended the week with a net loss of 169 points, or 1.67 per cent, when compared to the previous week.
According to reports China reported 57 new cases of the coronavirus on Sunday, the highest daily figure since April, even as concerns grow about a resurgence of infections.
India too has been witnessing cases that now exceed 10,000 new cases everyday, as Covid 19 continues to keep the markets jittery. In the US too, new cases have been surging in select states, leaving investors a little worried.
More risks of a downside
At the moment there are more downside risks to the market, and every rally is likely to be sold into. Investors should remain on the sidelines, with at least some of amount of cash in hand.
"Going ahead, we expect the markets to remain volatile and in a consolidation mode for sometime, as it would be driven by global cues, development around coronavirus cases and vaccines. Even valuations look a little stretched, thus markets may take a pause till some clarity emerges over whether the economy is on the recovery mode or not.
Hence, 'Buying on Decline' would be a better strategy over the next few weeks. Technically, 9500 would act as a strong support for the Nifty and we may see an up move towards 10200 zone, " Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd stated in his market commentary.
The most volatile stocks in the next few week could be the banking stocks. The Bank Nifty ended the week lower, and it would not be a surprise to see some more selling pressure next week. Investors are advised to buy into stocks of high quality banking names, in case they want to buy into banking stocks.
Shares in Reliance Industries may see some buying interest next week as TPG and L Catterton Invest Over Rs 6,400 Crore in Jio Platforms. On the other hand, pharma stocks may continue to see an upside on safe haven buying.
About the author:
Sunil Fernandes has spent 25 years covering business and finance in India and abroad. Sunil has worked with frontline daily newspapers including Hindustan Times, Deccan Herald and Gulf Times. He has also worked with investment magazines like Dalal Street Investment Journal and Oman Economic Review. His forte remains stocks, mutual funds and tax planning.