The market recently corrected sharply due to weak global cues, and the imposition of dividend distribution tax on equity oriented mutual funds & long term capital gains. It, however, managed to break the fall, and tried to recover with support from bargain hunting and bounce-back in global peers.
Last week, the market lost 3 percent and ended over its one-month low at 34,005.76 on the Sensex, but recovered nearly 300 points to end at 34,300.47 on Monday. In fact, the broader markets recovered faster than frontline indices as investors got an opportunity to buy quality stocks on sharp correction.
This recovery may continue but consolidation is majorly seen in short term as the market will watch out for stability in global peers before sharp recovery, so further correction can't be ruled out, experts suggest.
As we are near the fag end of the earnings season and most of major corporate earnings already priced in, and no major event lined up in the offing, the market is likely to take cues from globe, according to experts.
"We feel global cues will continue to dominate our market trend, in absence of any major event. Nifty may see some bounce or consolidate further however sustainability at higher level seems difficult," Jayant Manglik, President, Religare Broking said.
Traders should use further recovery to reduce existing longs and creating fresh shorts, he advised.
