Perspective on Markets by Karthick Jonagadla, investment manager on smallcase and Founder and CEO of Quantace Research
Below the Perspective on Markets by Karthick Jonagadla, investment manager on smallcase and Founder and CEO of Quantace Research
The market is beginning to look more like it's building a floor than pricing another leg of earnings downgrades. After slipping to 23,946 on Monday, the Nifty has rebounded to around 24,350, while the India VIX has fallen to 11.84, its lowest closing level since February, signalling a meaningful improvement in risk sentiment. Softer crude, a recovery in the rupee to around Rs 94.5-95 per US dollar from its late-May lows near Rs 97, and moderating foreign selling have materially improved the macro backdrop, but these are necessary rather than sufficient conditions for a sustained rally. A decisive close above the 24,350-24,400 zone would strengthen the case for a move towards 24,800-25,000 over the coming weeks. Beyond that, leadership will increasingly depend on Q1 earnings guidance, with financials and large-caps likely to remain the first beneficiaries if improving macro conditions translate into broader institutional inflows.
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