We are observing ongoing correction in last month and current month, which clearly tells that it is end of bull run, which has lasted more than a year and half. Still many people have question like will market fall further..? and can I invest now..?
First we will discuss will market fall further...?
If we see in long term perspective Nifty is up 28 percent in the last one year and 113 percent up over the last 5 years. But we have seen only 8 percent correction from recent highs, so there can be more room for correction, But we have to observe global level risk factors as well.
Inflation::
Globally we are seeing rising inflation in all the countries.. US, European Union, China are observing multi-year high inflation. The Interest rate cycle is undoubtedly changing at a rapid pace. Hence, rate hikes by the US Federal Reserve, in our view, remains one of the key global risks for equity markets.
China slowing down ::
The Chinese economy is going through a reset and possible to see growth levels of less than 5 percent for the foreseeable future. This is somewhat great news for economies like India, not just from an FII inflow perspective but also to play the China plus one theory. However, when you combine the slowing economy with rising inflation, the real danger for the global markets is China entering a stagflation situation. This remains the second biggest risk for the Indian markets at the moment.
FII selling::
We have seen Indian stock markets outperformed global markets in the last one year, Nikkei, Shanghai and KOSPI have all yielded single digit returns in the last one year. Even Dow Jones has under performed India by a wide margin. Thus, as we enter the year-end, naturally one place where FIIs are booking profits, is India. Till now FII sold nearly 27,000 crores still it is going on, It may need some time cool off.
Based on above global activities we may see side way markets for quite sometime, We may see little more correction but it won't be massive as covid correction levels, Our economy is on rise, until and unless we see fall in GDP/Economy, there is no need to worry.
So what should be my investment strategy.....?
Invest in quality stocks only that too never invest in lump some, divide the amount in 2 or 3 trenches and invest whenever you see some dip, If you see in long term perspective like more than 3 years we can expect massive returns.
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FunTech Team