Indian Stock Markets Mimic Dow Jones
Indian markets witnessed extreme volatility as the Dow Jones Industrial Average faced sharp decline after touching all-time high during first week of February. As the U.S. markets declined, Indian stocks also witnessed selling pressure with market dropping by nearly 1,000 points in a single trading session. However, as Dow Jones recovered in the second trading session after decline, Indian stocks jumped back to cover up some of the losses.
Dow Jones declined on Thursday again, sending shockwaves across the globe. Markets in Europe and Emerging markets witnessed decline during the last trading session. Dow Jones recovered some of the losses during Friday trading but volatility has resulted in panic selling in select stocks.
In Indian market, some midcap companies suffered major decline in valuations. While some market analysts feel that it would be the right time to buy some stocks which have declined from their recent highs, many are still waiting for a deeper correction. It wouldn’t be a good idea to trade during the current volatility. Investors looking for long term investment options should allocate funds at lower levels and wait for further declines to add more stock to their portfolio.
Many investors are waiting for markets to stabilize. Market experts believe that correction in the markets is long overdue. NSE Nifty is still above its crucial support levels. If Nifty breaks 10,300 in closing, it could trigger further selling and we can expect further support below 10,000.
PSU banks suffered correction during the recent trading session. Many banks reported higher NPA or slippages while interested income jumped during the last quarterly results. At lower levels, banks could witness value-based buying.