Sensex above 17000; near-term correction on cards

Bombay Stock Exchange’s barometer Sensex made its way past the mystical 17,000-mark for the first time in the last 16 months buoyed by Al-round buying momentum. However, market watchers are wary whether the current upmove can be sustained and forecast a correction in the near term.

“The overall trend looks bullish given that the Sensex has crossed the 17000 level. On the Nifty, after a decisive breakout above 5000, the next target is close to 5150 levels. From thereon, +/- 50 points move is likely where profit booking may set in. Today’s move was not backed by heavy volumes, which suggests caution and short term players should take this under consideration. Continuous FII inflow was witnessed in the month of September to the tune of around Rs 17500 crore which set the market momentum going. Going ahead, FII inflows need to be watched since the market mood will remain upbeat despite aggressive valuations if the inflows continue,” said DD Sharma, VP Research – Retail, Anand Rathi Financial Services.

“The market is due for a correction as the euphoria has sustained too long. The market may scale higher peaks but only after a period of consolidation or correction. We advise investors to adopt a buy-on-declines strategy,” said Manish Sonthalia, Portfolio Manager Motilal Oswal Financial Services.
~ET