New Delhi, Jan 20: Hyper speculative and trading activity has pushed many mid and small cap stocks to frothy valuations and correction in these stocks is only a matter of time, says V.K. Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
The recent correction in the market has not changed the underlying uptrend in the market. FII selling is being countered by sustained DII and retail buying. And the strength of the economy is providing fundamental support to the market. Therefore, FII selling is not strong enough to pull down the market hugely, unlike in the past when FIIs used to call the shots, he said.
This feature of the market can be utilised by investors to buy quality stocks which come under short term pressure due to FII selling. It is important to buy high quality stocks in performing sectors since many unproven stocks in the broader market are flying high on hopes rather than on fundamentals or strong prospects, he added.
Deepak Jasani, Head of Retail Research at HDFC Securities, said strong global cues prompted Indian equity indices to close higher on Friday after a three-day losing streak After a gap-up opening of more than 150 points,
Nifty consolidated throughout the day to close at 21,622.
From the recent low of 21,285, Nifty has registered a recovery of 385 points. The advance-decline ratio on BSE stood at 1.85 levels on BSE, the highest since January 4. As the breadth of the Market is very strong we expect the stock-specific bullish trend is likely to continue. In the near term, Nifty could face resistance at 21,850, while support is seen at 21,500.
BSE Sensex is up 155 points at 71,836 points on Saturday. Hindustan Unilever is down more than 3 per cent after quarterly results.
Indusind Bank is down 1 per cent, Wipro is down 1 per cent. Powergrid, NTPC are up 2 per cent.
(IANS)
