Swapnil Suvarna feels that the bearish trend will persist in the days ahead
As expected, the markets continued with their downward trend with both the Sensex and Nifty ending the week at 18,197 and 5,482 marking a decline of 525 and 152 points respectively.
Though the worries of global growth weighed on most Asian markets, the Indian markets opened steady. However, soon the domestic markets slipped downwards following a surprise rate hike of 50 bps by the RBI in its monetary policy review.
Finance Minister, Pranab Mukherjee’s cautious outlook and indications of more monetary tightening in future too weighed on the markets sentiments. The release of food inflation data for the week ended 16 July at 7.33% which was marginally lower as compared to 7.58% in the previous week, hardly made an impact on the trend due to volatility related with the F&O expiry for the month of July.
Week ahead
We expect the domestics markets to continue its downtrend on worries that the RBI’s recent rate hike would slow down the industrial growth which in turn could weaken the investment cycle. Also, the worries of the US debt default would weigh on the market sentiments.
Though the foreign investors ended up being net sellers, their inflows next week will be crucial to buoy the market sentiments.
In this volatile market, a disciplined approach of investing systematically in quality equity schemes through SIP will do well. Those with a short time horizon would do well to consider short term debt funds
