Stock Market: Increased risk in the market due to uncertainties

Indian stock markets are currently victims of uncertainties and are seeing many fluctuations in a single day, making it difficult to assess what the trend will be. Thus risk in market has increased and short-term investors are also facing losses.

Last week, there was pressure of uncertainty and market closed with a decline. Business experts say that for Indian stock market, BSE and NSE indices can be a yardstick to measure its overall momentum, but still they do not assess the true situation. An example can also be understood from the fluctuations in the market on Friday, in which in the last session, heavyweight stocks like Reliance Industries and ICICI Bank rose and the stock market, which was showing a negative trend, closed in the green.

Thus, it is important for common investors to understand that they should not get confused by the movement of index and focus on rise and fall in prices of individual shares.

Technically, it is being assessed that due to domestic and international reasons, there will be fluctuations in market this week too and Nifty index may trade between the lower level of 21600 and upper level of 22100.

There has been a downward trend in the Indian stock markets again last week. According to the data, last week there was a decline of 490.14 points in the BSE index and the BSE index declined from 72085.63 points to 71595.49, while the NSE index also declined by 71.30 points and NSE Nifty index declined from 21853.80 points to 21782.50.

Notably, midcap indices showed a different trend compared to the broader indices, with midcap index registering improvement while smallcap index mirrored the parent index’s decline.

Foreign Institutional Investors (FIIs) continued selling shares, amounting to Rs 5,871.45 crore, whereas Domestic Institutional Investors (DIIs) countered this by purchasing shares worth Rs 5,325.76 crore last week. In February, FIIs sold shares worth Rs 7,680.34 crore, DIIs bought shares worth Rs 8,661.41 crore.

Talking about bullion market, this week prices of gold fell by Rs 350 per 10 grams, while the prices of silver softened by Rs 500 per kg, and the price of gold was Rs 64,100 per ten grams and silver Rs 72,400 per kg.

Traders are expecting a slight decline in bullion business this week also due to weak demand. They say that if gold falls from the current $2030 per ounce to $2005 per ounce, then there will be a huge recession.

Regarding market trend this week, traders say there is a possibility of a rise in market, but this will happen after profit recovery stops and stability comes, hence new buying should be started after Nifty crosses 22200 points. State Bank of India, BHEL, Life Insurance Corporation of India and Jio Financial Services can be considered safe investments from the point of view of long term investment. For short term invest in shares of Tata Motors, Zomato, selected private and public sector banks, Adani Port etc.

(This is the personal opinion of the author. The author, his family members and acquaintances may have investments in the companies mentioned in the article.)

Vimal Kothari Associate Editor, First India News & Senior Journalist