The key Indian indices, the Sensex and Nifty, underperformed in Friday’s trading, mirroring the gloomy outlook throughout Asian markets. Gains in metal and electricity sectors were countered by losses in IT shares. The sole sectoral performance in the red was Nifty IT Pack, which was the weakest.
View of the Market
Most markets saw big gains during the December global rally spearheaded by the US, and India was lucky to also benefit from the results of the state elections. The market is getting a little hotter after the Nifty’s 6% surge in December, and bulls will probably hold off on taking more action until the New Year. High valuations are nonetheless a source of short-term anxiety.
Nonetheless, the US inflation rate, bond yields, and dollar index are all heading lower, indicating that the overall structure of the global market remains favourable.
The wisest course of action in the current market environment is still to buy on dips. Large caps are for safety. The automotive industry is positioned for a cyclical recovery.