Indian stock market is on a falling spree and has been volatile with a downward bias post Diwali last year when markets have hit a high of Nifty 6350 near the all time high. Given that then markets have traded in a range, but past few days on the back of concerns shown by FIIs have taken the markets to a new lower range on the back of High inflation, political tensions, loads of scams, political drama's, news of weak IIP growth figures, worry of RBI rates hike and so on have triggered outstanding volatility in Indian Stock Market even though the Global peers looks stable.
So why is the market falling and why are FIIs selling stocks in India?
Foreign Institutional Investors (FIIs) have poured in lot of funds entire 2010, approximately $28 billions of revenue came to India from the global investors. Entire 2010 rally came on the back and support of FIIs who kept pumping money on all rises and rates.
Indian Mutual Funds have rather observed withdrawal's than new investment and they have been on the sidelines. Now those FIIs who had been consistently obtaining are shaken by internal difficulties and affairs our country, India is currently facing.
Indian Government in a Catch 22 Circumstance
High Inflation remains the significant challenge for the Government. It's a Catch 22 circumstance for our Government, considering that they have the responsibility of taming down costs and inflation without having hurting the economical industrial growth.
Lower IIP no.s came as a double whammy for our market place, currently a marketplace which was surviving numerous economic scams, corruption challenges, political tensions and opposition drama's, lower IIP no.s was not expected by our industry and it sent the marketplace on a knee jerk reaction.
All these matters along political stability have worried the FIIs and they have been selling and withdrawing funds from riskier assets to safe havens. The International scenario looks much a lot more stable for now and that also tells you that capital is moving out from right here and going to locations where there are less internal problems for the time getting.
It is Not Exit India for FIIs - Just Temporary Weakish Sentiments
Its the sentiments and human psychology which tends to make investors Shop for - Sell or Exit a stock or a country general. With the FIIs promoting these days, lots and loads of folks are worried and asking if the FIIs are exiting India?
Lets talk logic. They invested more than $28 Billions last year in Indian equities, markets have gone up a lot because then, its not a crime that FIIs are booking profits and taking some of it to dwelling. They could be selling now and they will once more acquire at lower levels when prices reaches there desired zone.
When Will Nifty - Market Stop Falling To Rise And Go Up Again?
When Fundamentals don't speak considerably for telling the story, its the expertise of technical analysis which aids understanding the market place and its future. Fundamentals cannot predict peaks, neither can they predict industry bottoms, its the technical patterns and research which delivers a thing which looks so unpredictable.
Our evaluation on Indian stock Market suggests that markets are headed additional down in the days ahead. For now Nifty's future (5654) do not look vibrant and I maintain that it could see 5400 levels on the downside, precisely 5370-78 is the target I am looking at. But it will not go there straight, it shall require some far more pain and reaction which will take spot in a process.
My understanding of market tells me that, Nifty will show a temporary bounce back from 5550 levels on Nifty Future, which is 100 points beneath from the current market place value. We are really likely to see at least a 120-130 points bounce back on Nifty off 5550 levels which is the subsequent instant support level for marketplace likely to act as a cushion.
Nifty Lower Finish Target and Bottom Price
The dead cat bounce will be brief-lived and is most likely to happen rapidly off lower levels. On the greater side although bouncing back Nifty Futures will face strong resistance at 5705 and 5750 levels which shall take one thing to cross failing of which will once again cause a key sell off taking it towards the panic zone of 5370-5400 on Nifty.
For now it looks like that the bottom for markets to be close to 5400 levels. By the time it takes place nearly anything will be discounted and then markets will be seeking at a favorable economic budget, speculation of which will take the markets up bringing in the significantly needed stability.
Pleased Investing!
