Indian equity benchmarks continued to gyrate around the flatline before finishing in the red for a third straight session on Wednesday. Weakness in IT, metal, and auto scrips pulled the headline indices lower.
However, the stock market is now reaching a zone of value in select pockets. Because the market is predicted to be highly volatile today, investors should expect two-way movement.
Investors are bracing for more volatility on Friday, the last day of the May F&O series.
Because this is a bear market, everything must be viewed in context. Market players make the error of focusing just on the decline from highs and ignoring the large rally on the left side of that decline.
Smallcap index had tripled in 18 months and despite the 30 percent drop in the smallcap index over the last two years, the index is still up 122 percent, which is a significant rise. Other than that, the IT index has risen 100 percent despite a 30 percent drop in the last two years. IT companies continue to trade at a premium to their median valuations, while midcap IT stocks continue to trade at a premium to large-cap IT stocks.
This is the seventh month of a bear market and the average length of a bear market is about one year, according to a report.
Watch the accompanying video of CNBC-TV18’s Anuj Singhal for more details.