Indian stocks fell sharply on Monday, tracking weak global cues amid concerns that strong US jobs data could force US Federal Reserve to raise interest rates sooner than previously thought.
The Sensex and Nifty fell as much as 2 per cent today. But Anil Manghnani, director of Modern Shares & Stock Brokers, says that such corrections are part of the normal process in a bull market and Nifty has strong support at 8,630. "The overall trend has not changed and in the past bull markets we had deeper corrections," he said. (Watch Video)
A correction in Nifty was overdue from both a time and price perspective, he said.
Markets have been moving in a one-way direction since February 2014 when the current leg of the bull run started, he said.
In this bull run, the 200-day moving average has not been tested, which has happened in past bull runs, he added. The 200-day moving average is currently is at 8100 levels, he added.
So today's correction is not out of the ordinary, he added.
The Bank Nifty which led the selling pressure today has support around 19,000 levels, Mr Manghnani said. The Bank Nifty was down 2.6 per cent at 19,224 today.
Today's selloff is a continuation of the selling pressure witnessed on Wednesday after the RBI in a surprise cut rates by 25 bps, he said.
On Wednesday, Nifty fell 0.82 per cent after rising 1.3 per cent intra-day on the euphoria over RBI rate cut. The markets on Wednesday fell amid profit-taking with high volumes, Mr Manghnani said. On Wednesday, Sensex had hit the 30,000 mark for the first time while Nifty hit an all-time high of 9,119.
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