 "BS Poll: Market experts fear up to 10% more correction")
Most market participants believe a further correction is likely in the near term on the back of disappointing corporate earnings, taxation of foreign investors, a poor monsoon and a slowdown in policymaking. However, an equal number also believe things could pick up by the year-end, according to a Business Standard poll of market mavens.
Five of the 11 market experts polled said there was a case for revising index targets downward in light of the recent issues the market was facing. For those who saw the possibility for a further decline, downside estimates ranged from two, four and eight per cent to as high as 10 per cent. Six others said they were holding on to their targets for now.
The Nifty fell below its 200-day moving average of 8,215 on Monday, closing at 8,213.8. The Sensex also closed at 27,176.99, below its 200-DMA of 27,482.4. On Tuesday, indices were up 0.8 per cent. The Nifty closed at 8,285.60. The Sensex closed at 27,396.38, recovering from a 1,004-point or 3.53-per-cent decline over the previous week.
Sectors that can see further correction include consumer discretionary stocks that depend on the rusral economy for its sales, as well as information technology (IT) and pharmaceutical stocks. Capital goods and banking also figured in the list of stocks with some downside.
“We believe IT and pharma both look week technically, [and] obviously IT after the muted earnings. This sector can still see some more nervousness," said Rahul Shah Equities Advisory Group, Motilal Oswal Securities.
Those surveyed were Ambit Investment Advisors, ICICI Securities, IIFL, Sharekhan, Antique Stock Broking, Motilal Oswal Securities, Karvy Stock Broking, Reliance Securities, Geojit BNP Paribas Securities, Emkay Global and Equinomics Research & Advisory.
Fifty-five per cent of participants believe the market could correct further, while 45 per cent believe there is room for consolidation at these levels. A similar percentage of those surveyed said there was a case for moderating their expectations of year-end targets.
"The correction happened as there were no triggers on the ground level. Many stocks had also run up beyond fundamentals. FIIs [foreign institutional investors] again felt the heat of retrospective tax and the government was slow in damage control," said independent analyst Ambareesh Baliga.
The resolution of the minimum alternative tax (MAT) issue is the biggest immediate trigger for the market, according to the survey. About 37 per cent of the total respondents said it would be the biggest trigger and could lead to short-covering if it was expeditiously resolved. An improvement in corporate earnings was the next biggest trigger, with 27 per cent of respondents opting for it. Monsoon and an interest-rate increase by the US Federal Reserve were the other key triggers the survey picked up.
Five of the 11 market experts polled said there was a case for revising index targets downward in light of the recent issues the market was facing. For those who saw the possibility for a further decline, downside estimates ranged from two, four and eight per cent to as high as 10 per cent. Six others said they were holding on to their targets for now.
The Nifty fell below its 200-day moving average of 8,215 on Monday, closing at 8,213.8. The Sensex also closed at 27,176.99, below its 200-DMA of 27,482.4. On Tuesday, indices were up 0.8 per cent. The Nifty closed at 8,285.60. The Sensex closed at 27,396.38, recovering from a 1,004-point or 3.53-per-cent decline over the previous week.
Sectors that can see further correction include consumer discretionary stocks that depend on the rusral economy for its sales, as well as information technology (IT) and pharmaceutical stocks. Capital goods and banking also figured in the list of stocks with some downside.
“We believe IT and pharma both look week technically, [and] obviously IT after the muted earnings. This sector can still see some more nervousness," said Rahul Shah Equities Advisory Group, Motilal Oswal Securities.
Those surveyed were Ambit Investment Advisors, ICICI Securities, IIFL, Sharekhan, Antique Stock Broking, Motilal Oswal Securities, Karvy Stock Broking, Reliance Securities, Geojit BNP Paribas Securities, Emkay Global and Equinomics Research & Advisory.
Fifty-five per cent of participants believe the market could correct further, while 45 per cent believe there is room for consolidation at these levels. A similar percentage of those surveyed said there was a case for moderating their expectations of year-end targets.
"The correction happened as there were no triggers on the ground level. Many stocks had also run up beyond fundamentals. FIIs [foreign institutional investors] again felt the heat of retrospective tax and the government was slow in damage control," said independent analyst Ambareesh Baliga.
The resolution of the minimum alternative tax (MAT) issue is the biggest immediate trigger for the market, according to the survey. About 37 per cent of the total respondents said it would be the biggest trigger and could lead to short-covering if it was expeditiously resolved. An improvement in corporate earnings was the next biggest trigger, with 27 per cent of respondents opting for it. Monsoon and an interest-rate increase by the US Federal Reserve were the other key triggers the survey picked up.