Unlock Profits: Proven ‘Buy on Dips’ Strategy Thrives in Indian Stock Market’s Exciting Rebound!
The Indian stock market ended the week on a high note, driven by a robust 2,000-point rebound, reflecting the efficacy of a buy-on-dips strategy, market experts noted. This positive turn came despite cautious broader market sentiment, largely thanks to gains in FMCG, IT, and banking stocks. The resilience is partly attributed to inflation being within the Reserve Bank of India’s tolerance level and the expectation of further easing in food prices due to seasonal corrections, potentially paving the way for a relaxed monetary policy by February, according to Vinod Nair, Head of Research at Geojit Financial Services.
On Friday, the Nifty index surged over 2% from its daily low, closing with a gain of 220 points at 24,768, while the Sensex rose by 843.16 points, or 1.04%, to end at 82,133.12. This recovery countered an intraday sell-off which stemmed from broader weakness in Asian markets impacted by a strong dollar, rising US Treasury yields, and uncertainties surrounding China’s economic plans, as noted by Siddhartha Khemka from Motilal Oswal Financial Services Ltd.
Sectoral performance was mixed. The Nifty Metal index declined by 0.7% due to lingering doubts about China’s stimulus measures. Conversely, the Nifty IT index reached a new high, climbing approximately 3% for the week, aided by US inflation data aligning with expectations, thus raising hopes of an imminent rate cut by the Federal Reserve.
Meanwhile, gold experienced a sharp sell-off, attributed to profit booking amidst mixed signals from US economic data, with MCX Gold falling from Rs 79,000 to Rs 77,450. Experts suggest a potential trading range of Rs 76,000–Rs 78,000, cautioning a continued volatile outlook.
Amid these developments, midcap and smallcap stocks underperformed, with the Nifty midcap 100 and smallcap 100 indices slightly declining. However, signs of recovery in Industrial Production and core sector data indicate improved earnings for H2 FY25, with reduced FII selling expected to further buoy market sentiment in the near term.
Original Source: https://www.morungexpress.com/buy-on-dips-strategy-working-well-in-indian-stock-market-amid-sharp-rebound
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Publish Date: 2024-12-14 10:04:00
