The Nifty 50 index, hit a low of 10,866 levels, but settled 91 points lower at 11,143, read this how is the Nifty & Nifty Bank Outlook for next week.
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For this sudden fall, Market experts blamed higher crude oil prices, weakness in the rupee and bearish global cues for the market blues.
For immediate triggers, they blamed financial crises at IL&FS (Infrastructure Leasing & Financial Services) and sharp slide in YES Bank’s shares
after the lender’s MD and CEO Rana Kapoor was denied extension by the Reserve Bank of India.
The decline came on the back of a sharp fall in NBFC stocks. DHFL skidded over 50% in intraday trade on fears of a liquidity crisis.
The management, however, assuaged investor concerns and said the company has not defaulted on any repayments. According to the analysts, the IL&FS crisis was the main reason behind the selloff.
What we should do after this selloff:
- This looks like a technical selloff, as nifty has closed on its weekly 20EDMA of 11140.
- This looks like speculative unwinding and for a long-term investor, if you really understand the company and if you have faith in the management, these are brilliant opportunities to buy these companies. Wherever the management is solid, they will be able to weather this storm and come out stronger.
- As per my personal views some top brand companies may bounce back with good results in coming quarters, so investor should periodically accumulate these companies over the time. For Ex.- HDFC bank, TCS, Maruti, Kotak Bank, Asian Paints, Reliance Industries, ITC, Infosys, Britannia, Indusiand Bank, Titan, HDFC Life, Nestle, D-mart, HUL, Eicher Motor, Info Edge, Indigo,Whirlpool, Bajaj Finance, Bajaj Finserv, Jubiliant Food...etc
- For technical trades one can have a look on my weekly market outlook here.