Stock Market Outlook: The stock market fell sharply on Monday on the first trading day of the week and the Sensex closed down 540 points. The Nifty also came close to 11750. However, largely no domestic sentiment was seen behind this decline. Expert says that global factors dominate the market right now. Such pressure will be seen in the market till the Presidential election in the US. Globally, elections in the US, decisions on relief packages, the rising cases of corona in many countries of Europe can affect the market. The market is currently waiting for a strong sentiment.
Let us know that the presidential election is going to be held on 3 November 2020 in America. Its effect has started showing on the global market as well. Joe Biden appears to be ahead of Trump in many surveys coming there. This creates political uncertainty in the US. The situation is not clear on the second relief package in the US. Due to the US Presidential election, this kind of upsurge is seen in the global market every time. However, despite this uncertainty, the S&P 500 index is close to its high. But it may fall in the next few days.
Better to be stock specific
Ajit Mishra, VP-Research, Religare Broking Ltd, says that the market has started this week with weakness. Domestically, no sentiments were seen to support the market. Whereas the global factor dominated on Monday. For this reason, after launching the flat, there was heavy selling in the market on Monday. Metal and auto stocks broke badly. The broad market index also saw weakness.
He says that in many countries of America and Europe, the cases of coronavirus are once again on the rise. At the same time, investors are now seeking clarity on the relief package in the US, which is not getting. At the same time, some announcements are also increasing volatility at the domestic level in the earning season. He says that there may be pressure in the market till the election. In such a situation, it is a better strategy to remain stock specific.
Looking for strong sentiments
Nirali Shah, Senior Research Analyst, SAMCO Securities, says that there may be some further correction in the market. Profit booking can be seen in cement, FMCG, pharma IT. He says that if there is no negative sentiment in the market, then the market will remain range-bound this week, but it is not expected to accelerate till the US election.
During this period, there is a possibility of getting some support from the quarterly results. Investors should be cautious during this time to invest money in the market. If you want to invest money, you can add some more shares of well-capitalized private sector bank to your portfolio.
He says that the market will continue to revolve in the range of 12050 to 11600 till the US election. The market needs a strong sentiment to cross 11600. Investors only invest once the market stabilizes.
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