Last week, Indian markets declined 5 percent due to weak global economic indicators. This week, Swapnil Suvarna expects the domestic markets to remain weak but bargain buying by institutional investors will lead to short spells of rally
As expected, concerns in the euro-zone and signs of slowdown in the domestic economy led to a sharp plunge of 5 percent. The Sensex and Nifty closed at 16,372 and 4,906 declining 821 and 263 points respectively.
The week started off on a negative note following rise in the Italy bond yields which further raised doubts about the ability of the new formed government in Italy and Greece to resolve their debt crises and boost market confidence. The market further slipped into the red - territory on announcements of weak corporate earnings.
The market sentiments continued to stay negative after Bank of England said the prospects for the UK economy have worsened and global demand has slowed down. Also, reports that rising borrowing costs were affecting AAA-rated France, have further stirred fears of escalating debt crisis in the euro-zone.
Week Ahead
We expect the domestic markets to remain weak because of continuing signs of pessimism globally. However, bargain buying through institutional investors will lead to short spells of rally.
Overall, weak global developments and concerns of depreciating rupee, rising interest rate and costs, slowdown in corporate earnings and economy remain.
The best approach in such uncertain times is to continue suggesting your investors to invest in quality equity funds through SIPs.
