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Market Watch: What led to Friday's selloff? Are market valuations unsustainable?


Welcome to ETMarkets Watch, the show about stocks, market trends and money-making ideas. I am Nandini Sanyal. and here are the top headlines at this hour.

Investments via P-notes stand at Rs 97,744 crore till August
Moody’s says telecom package credit-positive for Airtel, Jio
GST Council extends concessions on Covid-related drugs, reports ET NOW
White goods industry dishes out Rs 5,866-cr investment plan
And
World Bank Group to discontinue ‘Doing Business’ report

Let us take a quick glance at what happened on Dalal Street today.

Friday saw benchmark indices taking a U-turn at all-time highs, catching up with the weakening broader market. Sensex retreated 720-odd points from day’s high and barely managed to hold above 59,000-mark at close. Nifty50 ended below 17,600. The NSE barometer was on the verge of breaching 17,800 at one point, before the selling pressure set in.

Before this, benchmark indices had fallen only in four sessions in September, with Sensex rallying over 2,000 points in the previous 11 sessions. Technical charts were sending overbought signals and valuations too were above most investors’ comfort zone. As such Friday’s fall did not surprise analysts. For the day, Tata Steel, SBI, TCS, HUL and Reliance fell up to 1.5-4 per cent. A total of two BSE stocks fell for every one that rose. Midcap and smallcap indices ended up falling 1 per cent each.

We have Arijit Malakar, Head of Research at Ashika Stock Broking, to share his views on the day’s action and the road ahead:

Welcome to the show sir:

1) What led to Friday’s selloff? Do you think market valuations are unsustainable?
2) How should investors position themselves? Do you see a case for profit booking?

We also caught up with Nilesh Jain of Centrum Broking to decode the technical charts for you.

1) Nifty took a U-turn near 17,800 level. Do you think the index has made a near-term top?
2) What is your view on Nifty bank?

Major Asian markets settled higher for the day. European markets were also trading higher in the first few hours of trade. US stock futures were flat, hinting towards a muted start to US equities later in the day.

That’s all for now. Do check out ETMarkets.com for all the news, market analysis, investment strategies and dozens of stock recommendations. Enjoy your evening. Bye Bye!



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