Market in bear grip: Expect no dream run in the run-up to Budget 2016, warn analysts
Domestic markets have corrected over 20 per cent from their all-time highs as investors extended declines in a global equity rout sparked by European markets.
- Feb 11, 2016,
- Updated Feb 13, 2016 5:58 PM IST
With Thursday's plunge, domestic markets have sank deeper into bear market territory correcting over 23 per cent from their all-time highs as investors extended declines in a global equity rout sparked by European markets.
A drop of 20 per cent is considered the start of a bear market.
The S&P BSE Sensex tumbled 23.55 per cent from its all-time high of 30,024 that it hit in March last year, while broader CNX Nifty shed 23.29 per cent from its life-time high of 9,119.
Experts do not see much respite for the markets and expect the headline indices to extend declines in the run-up to and post Budget 2016. Dinesh Rohira, Founder & CEO of 5nance.com sees Sensex and Nifty to hit 22600 and 6900 levels if government fails to come up with a bold Budget and follows the same footsteps as last two years.
"Domestic markets will correct unless there are some bold reforms, like the 1997 or 1991 budget, which will change the face of the economy or at least a budget that will promise a policy framework for bolder reforms in the coming future," said Rohira.
"I see little reason why the risk-off in the global markets and also the reverse-flow from emerging markets will change in a hurry. We believe markets will move in the plus/minus range of 5 per cent post Budget," said Vora to Business Today online.
G Chokkalingam, Founder & Managing Director of Equinomics also sounded the similar concern and said outlook for the market looks quite bleak due to adverse global factors i.e. rising deflationary pressures. Domestically, he believes, inability of the RBI to help the aggregate demand in the economy and the banking system is contributing to the market fall.
With Thursday's plunge, domestic markets have sank deeper into bear market territory correcting over 23 per cent from their all-time highs as investors extended declines in a global equity rout sparked by European markets.
A drop of 20 per cent is considered the start of a bear market.
The S&P BSE Sensex tumbled 23.55 per cent from its all-time high of 30,024 that it hit in March last year, while broader CNX Nifty shed 23.29 per cent from its life-time high of 9,119.
Experts do not see much respite for the markets and expect the headline indices to extend declines in the run-up to and post Budget 2016. Dinesh Rohira, Founder & CEO of 5nance.com sees Sensex and Nifty to hit 22600 and 6900 levels if government fails to come up with a bold Budget and follows the same footsteps as last two years.
"Domestic markets will correct unless there are some bold reforms, like the 1997 or 1991 budget, which will change the face of the economy or at least a budget that will promise a policy framework for bolder reforms in the coming future," said Rohira.
"I see little reason why the risk-off in the global markets and also the reverse-flow from emerging markets will change in a hurry. We believe markets will move in the plus/minus range of 5 per cent post Budget," said Vora to Business Today online.
G Chokkalingam, Founder & Managing Director of Equinomics also sounded the similar concern and said outlook for the market looks quite bleak due to adverse global factors i.e. rising deflationary pressures. Domestically, he believes, inability of the RBI to help the aggregate demand in the economy and the banking system is contributing to the market fall.