New Delhi: Analysts think that the poison is out of the system and we may have bottomed out at around 9,200 levels when the markets crashed by 461 points on June 8.
However, one must watch out the broader range of 9,200-11,000 and crude oil prices soaring above $72 would become a matter of concern they feel.
On a positive note, they expect the markets to open on a firm footing on Monday.
Deven Choksey, KR Choksey Sec
Market is pretty safe
The view on the market is pretty safe. We are still enjoying around 9% yield on Sensex stocks. Sensex stocks are quoting at around 14 times forward PE, which gives 7 per cent yield.
No market in this world gives 8% tax free returns
Dividend will be announced in the next 3 months, which will be around 2 per cent, that means you have 9 per cent tax free yield on Sensex stocks.
This is a point which is a driving principle because nowhere in the world stocks offer 9 per cent tax relief and that too from those companies which are about 50-70 per cent of the market cap of the nation.
The poison is out of the system
Whatever poison that was there in the market in terms of leveraging, borrowing or global markets are all to a great extent discounted. Even if Fed increases the rate and Japan increase the rate and the other countries have already increased the rate, almost everything is factored in and people have withdrawn their money, particularly the momentum on hedge funds, which are leveraged.
Hedge funds would have to come back
Having withdrawn their money to outperform the market in the falling market, they will have little choice to invest that money back into the market.
That would once again offer volatility but at the same time the markets will go up because ultimately valuations are good.
Oil below USD 65-68 will help global economies breathe easy
My reading says that oil will come down to $65-68 and if it stays there then most of the economies of the world would be breathing easy. Oil will not be a spoil-sport in the immediate future but we have to see the geopolitical situation.
Watch out for 9,200-11,000 this month
Markets have given a clue that 9,200-11,000 would be the levels to watch out for in this month.
Guarang Shah, Geojit Financial Services
Can we sustain Friday's strength on Monday?
The way the markets have closed today looks good but it remains to be seen whether on Monday we will sustain this kind of a high or we will have selling pressure. One should be choosy and stocks specific. The way it has closed, one can see a positive opening.
Crude oil above $72 will be a concern
If crude oil prices crosses USD 72 a barrel then we have a concern in hand, redemptions from mutual fund, FII activity.
10,000-10,250 on the upper side and 9,200 are the key levels
10,000-10,250 on the upper side of Sensex and on the lower side 9,200 are the key levels. It should not break any of them.
S P Tulsian, Investment Advisor
We presume that the markets have bottomed out
Today’s bounce back is a very big relief and if we presume that the markets have bottomed out, so the next week it should first get settled and should not fall further.
If that happens then we could say that market is returning to normalcy. In that situation 10,000 will be a reasonable level and 9000 could be bottom.
Poison is getting out of the system
Overreaction, payment problem, crisis problem is all tapering off. It seems that the poison is getting out.
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