Mumbai While the benchmark Nifty index has rallied 14.5% from its June low in just under five weeks, and the volatility index, India Wicks, is showing no signs of underlying fear on D-Street, most fund managers and markets Experts said investors should be cautious as a potential peak may be imminent.
Nilesh Shah, chief executive and managing director, Kotak Mahindra AMC, said he expects key support from the June 15183 low, but the market may be “near” a top, after which it may turn sideways. Investors should stick with allocations that have “religion” and “equal weight”, using dips to buy in a phased manner over the long term, he said.
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His word of caution assumes significance, given that the Nifty has risen 2,200 points to 17388 in a span of 33 sessions from its June lows, and the fear gauge remains at 18.43, or more than its multi-year balance of 20. is close.
Vix levels below 15 indicate excitement and above 25 indicate extreme fear.
The market is now trading down 7% from its record high of 18,604 on 19 October 2021.
According to Naveen Kulkarni, Chief Investment Officer, Axis Securities, “the worst FII sell-off is behind us,” but macroeconomic developments will continue to limit the market upside.
He expects 17000-17800 to be the near-term market range, up 2-2.5% from Wednesday’s close at 17388. Kulkarni expects Nifty to touch 18400 by the end of FY 2013.
Kulkarni said the European conflict, the direction of oil prices and inflation and growth in developed economies would be potential risks to the market.
Data from Axis Securities shows that due to factors, FIIs sold shares worth $33.1 billion since October last year. On the other hand, DIIs were net buyers of $40.7 billion, limiting the downside.
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