Trade With Caution

“What defines us is how well we rise after falling,” American author and motivational speaker Zig Ziglar had said famously. The Indian equity market seems to be re-establishing this with a remarkable upsurge from its March 20200 bottom. Benchmark indices have already tramped past their last January peak by around 19 per cent. But, after this extreme roller-coaster ride, markets have now turned cautious due to profit-booking globally. The Sensex is down 7.3 per cent from its all-time high and continues to remain volatile.

Near-Term Outlook

After the yo-yo, there is a limited upside now. It would be realistic to expect modest returns from the current levels, according to V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services. “Around 53,800 on the Sensex and 15,800 on the Nifty would be realistic targets. If there are clear indications of a sustained economic growth and corporate earnings recovery, it is possible that FPI inflows may accelerate. This can’t be ruled out; 11 per cent GDP growth and 25-30 per cent earnings growth are achievable in FY22. But since valuations are high, market would be excessively volatile,” he cautions.

A Turbulent Ride

The coronavirus outbreak ensured strict lockdown measures, which turned out to be