Markets Oversold, Nifty At Solid Support Level, Says Analyst
The benchmark equity indices have rebounded on Monday from a one-session fall.
The Indian equity markets are oversold, and the benchmark NSE Nifty 50 has found solid support at the 21,900 level for the past four sessions, according to Hemen Kapadia of KRChoksey Shares & Securities Pvt.
The India VIX is at 14 and the volatility index being below 13 would have been a confidence-giving measure, the senior vice president at KRChoksey told NDTV Profit.
India's benchmark indices rebounded on Monday from a one-session fall, with the Nifty 50 closing 0.15% higher at 22,055.70 and the S&P BSE Sensex ending 0.14% up at 72,748.42.
"In the last four sessions, the Nifty has found solid support at (the) 21,900 level. If and when we break that, we will see a 300-point downside. Currently, that's not on the horizon. The markets are oversold," Kapadia said.
He has a 'buy' call on Britannia Ltd. and United Breweries Ltd.
Metal Rally
Although the China factory output data is encouraging, leading to higher global steel prices, benefitting Indian steel manufacturers, retail sales have slowed, according to Aditya Welekar, senior research analyst at Axis Securities Ltd.
"We are more concerned about the property sector data, which has not recovered. New construction has plummeted," he said, highlighting that steel inventories in India are building up ahead of the general election.
Welekar has a preference on non-ferrous stocks like Hindalco Industries Ltd., Tata Steel Ltd. and Vedanta Ltd.
Significant movement in global metal prices can result in upward push in stocks in this space, but the rally is a bounceback over last week's decline. according to Amnish Aggarwal, head of research at Prabhudas Lilladher Pvt. "There is no change in (the) medium to long-term trend."
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