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The break-neck stocks rally reversed on Dalal Street and the market consolidated on Wednesday, as profit booking emerged at higher levels.
The BSE Sensex closed 1.29 per cent, or 504 points, down at 38,594, while the 50-share Nifty index settled nearly 150 points, or 1.28 per cent, lower at 11,440.
Analysts said while their market outlook remained bullish, the current leg of the rally may have got over.
They now expect the market to consolidate for sometime.
“I don’t think the rally will end, but we may see some consolidation in the near term after the 1,000-point spike in Nifty.
Every fall will bring an opportunity to buy for investors.
This is the time for those who have missed the bus,” said Sanjeev Hota, Head of Research, Sharekhan.
Hota said the India story remains intact given the recent reforms.
Market sentiment turned positive after Finance Minister Nirmala Sitharaman slashed corporate tax rates over the last weekend.
Following the development, global brokerage firms including Morgan Stanley and UBS upped their year-end targets for Sensex (45,000) and Nifty (13,300), respectively.
Siddharth Sedani, Vice-President for Equity Advisory at Anand Rathi Shares - Stock Brokers, agrees this phase is a second opportunity for investors, who missed the first rally.
“The market witnessed profit booking on Wednesday.
It is taking a breather, which is a healthy sign.
This gives an opportunity to investors to buy,” he said
He pointed out that overall, things have not changed for the market.
“Going forward, we may see a jump in earnings for Q3 and Q4.
We are positive considering the things that happened in last one week,” Sedani said.
Experts blamed profit booking and political crisis in the US for Wednesday’s fall, but said it was a short-term reaction.
Sahaj Agarwal, Head of Derivatives at Kotak Securities, said the market may remain rangebound in the near term.
Chartist Nagaraj Shetti, Technical - Derivative Analyst at HDFC Securities, sees some weakness in the coming sessions.
“Wednesday’s pattern indicates a minor negative reversal, post the recent sharp bounce,” he said.
