Indian Stock Market Starts on a Positive Note, HCLTech Shares Drop 9%
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Synopsis
On January 14, the Indian stock market opened positively while HCLTech shares suffered a 9% drop following disappointing Q3 results. Market analysts highlight ongoing concerns about overvaluation and potential corrections, particularly in mid and small caps.
Key Takeaways
- HCLTech shares fell by 9% post Q3 results.
- Nuvama downgraded HCLTech from buy to hold.
- Nifty and Sensex showed gains in early trading.
- Market analysts warn of potential corrections.
- FIIs sold equities worth Rs 4,892.84 crore.
Mumbai, Jan 14 (NationPress) The domestic benchmark indices opened on a positive note on Tuesday, while HCLTech’s shares plummeted by 9 percent in early trading following Q3 results that failed to impress brokers.
The brokerage firm Nuvama has revised HCLTech’s rating from “buy” to “hold”.
The NSE Nifty 50 and BSE Sensex both showed gains at the start. As of 9:16 a.m., the Nifty 50 surged by 113.60 points or 0.49 percent, reaching 23,199.55, while the Sensex climbed 370.21 points or 0.49 percent to hit 76,700.22.
Market analysts have noted that the ongoing sentiment from various prudent voices indicating that the broader market is overvalued and may face a sharp correction is now becoming evident.
There is a trend towards reversion to mean valuations in large caps as well. The strengthening dollar, alongside 10-year US bond yields rising above 4.7 percent, coupled with uncertainties regarding Donald Trump’s actions post January 20, have all contributed to this market adjustment, experts observed.
The Nifty declined by 1.5 percent on Monday, marking a decrease for the fourth consecutive day and the sixth decline in seven sessions.
“From a technical standpoint, the 22,830-23,000 range serves as significant support. Notable near-term time cycles are aligning between January 17 and 23,” said Akshay Chinchalkar, Head of Research at Axis Securities.
It seems the market is slightly oversold, which could support a rebound in the near future.
“However, if this trend unfolds, it may not be sustainable. More challenges are anticipated for mid and small caps. The prudent approach for retail investors is to acquire quality large-caps that are currently undervalued and adopt a patient strategy,” stated experts.
Foreign institutional investors (FIIs) disposed of equities amounting to Rs 4,892.84 crore on January 13, while domestic institutional investors purchased equities worth Rs 8,066 crore on the same day.
“In light of the current volatility, traders are advised to proceed with caution, implement stringent stop-loss strategies, and refrain from holding long positions overnight to effectively manage risk,” suggested Hardik Matalia from Choice Broking.
