The market was on tenterhooks post the Pulwama attack on February 14 and that is why we have seen domestic investors have been on sidelines as they have been selling on rallies. The mood remains that you sell the rally which is largely from the global side.
Bulls managed to push the Nifty index above 10,800-10,850 on Monday, but escalating tensions across the border may hit momentum, feels Ajay Srivastava, CEO, Dimensions Corporate Financial Services in an interview with CNBC-TV18.
“The market was on tenterhooks post the Pulwama attack on February 14 and that is why we have seen domestic investors on sidelines as they have been selling on rallies. The mood remains that you sell the rally which is largely from the global side,” he said.
“We don’t know in which way the geopolitical situation turns. Either investors should stay on sidelines or we take off positions in stocks which are likely to see a direct bearing if the situation escalates such as Reliance Industries as well as import companies because rupee might get impacted,” said Srivastava.
The Nifty rallied from the lows of 10585 recorded on February 19 to reclaim 1080010850 levels on Monday. It also breached its crucial 200-DMA on the upside which is a positive sign. The rally was largely on account of global cues, but will the rally sustain that remains to be seen.
Does this dip become a buying opportunity for investors?
Srivastava is of the view that most retail investors have been in the market for 3-5 years with no returns and that is why we have seen that investors book profits the moment they reach their threshold level.
“I am not too sure that this is the rally which people will be buying into because we have not seen a great economic revival. And, if there is an additional burden of defense expenditure it will impact our fiscal deficit,” he added.
Economic triggers are missing and if the situation across the border escalates it will be for the worst for equity markets. This is a time when you don’t want to be putting your money to risk as you can easily get 8.5-9 percent FD interest rate which will keep your money safe.
