Nifty from its 2018 lows around sub-10,000 has consistently making higher bottoms is not a function of bear market. In fact, it has been holding above 10,900 levels from last week.
The reality in NSE Midcap 100 is unlike the Nifty50 as after the fall in January, the index has been making lower bottom, so it indicated that there is a bear market in midcaps and smallcaps.
"In the short run, let the midcap index keep tanking, let it stabilise, but the recovery will not happen across midcaps and will be very selective. Generally, it happens in every bull market."
The Nifty Midcap index plunged 15% and Smallcap lost 23% this year against the rally of 47% and 57% in 2017, respectively.
Globally, India is a standout market, though money has been moving towards developed markets, he said. "In fact, Dow Jones is far away from its record high levels."
Going ahead, analysts feel the Nifty Metal index can slip another 5–10 per cent from the current levels if fear over trade war escalates. In this backdrop, the fall in individual stocks could be higher at 10–15 per cent, they say.
“Companies are not doing any major expansion across the globe. Investment in infrastructure or building factories, too, is lacking. Given this, metal stocks are likely to underperform. Investing in this market segment is not a good idea. The Nifty Metal index is likely to end 2018 around 20–25 per cent lower on a YTD basis,” says A K Prabhakar, head of research at IDBI Capital.
On the Brent crude futures, he feels $71-72 a barrel are crucial levels. "We can see a dip of $8-9 a barrel if crude prices slip below $71-72 per barrel."
The rupee has been trading in the range of 68-69 to the dollar. Suri said the currency will remain range bound and will not be going to lower levels.
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