Indian Stock Market Steps Out of Correction Phase?

The drop out in Corporate Governance is leading towards some of the major decliners with the estimation of 500 biggest Indian companies. Among the issues array from auditors exits to derisory disclosures, the least five of ten biggest losers of the average index in Indian stock market have lost more than half of their worth in June quarter.

Vakrangee stock price declined by -40% in April-June and almost same out come of Kwality, Manpasand Beverages, PC Jeweller, Reliance Naval and Engineering has been recorded.

This slouch better serves to strike investors about the shortcoming risk of bad governance standards, Said Amit Tandon, MD, Institutional Investor Advisory Services – Mumbai.

The warning signals including companies lacking with strong fundamentals for leading the market, hyper speculation are not in existence. He further insisting around the missing scenario of macroeconomic policies and downfall of policies which apprehended the global economy and can discounted the possibility in upcoming time.

It is a clear indicator that Indian stock market is stepping in the correction phase. According to Shankar Sharma, Vice-Chairman and Joint MD, First Global, the ingredients of bear market is completely lacking though.

The Nifty 50 tested its 50 days EMA whch gains to 10,777 levels which formed an upbeat on daily scale and leads further to higher LOWS for the last two sessions. This index would be closed around the down supply trends by connecting the trend lines of 10,893 and 10,837 levels. It it still holds to 10,777 then it can be a fresh short covering to drive the index towards 10,835-10,888 levels.

Experts do not believe any more, the market will regain the bear phase. It mingles up multiple probabilities on national and international levels. The raise in dollar price, lifts up of oil prices, boost in cryptocurrencies, all became the major factors with an intermediate calcify of corporate governance lapses.

“The market will stay on tenterhooks due to political headwinds and high valuations. Unexpected moves from the US President, Donald Trump, can also hurt the market,” says Raamdeo Agrawal, Joint MD and Co-Founder, Motilal Oswal Securities.

It is predicted that elections of Karnataka become a semi-final match of Lok Sabha Elections in 2019. It will also elevate qualms regarding the NDA boosting power in 2019.

Amar Ambani, Head, Research, IIFL seconds this with his conviction, there might be some political sentiment-driven correction as the BJP didn’t win Karnataka.