The Nifty50 could see its deepest correction near 13,500, said CLSA's Laurence Balanco on Friday as the broader NSE benchmark plunged over 500 points in trade today amid a global equity sell-off. The market expert also said that the correction until the 13,500 mark won't affect the bull-case for India. On Nifty Bank, Balanco said he's looking at 32,500 as a strong support zone.

Share Market Live

NSE

“The deepest correction would be a move back to the late January low at 13,500 for Nifty,” said Laurence Balanco of CLSA. It is a correction rather than a major reversal in equity markets, he added.

“However, that wouldn’t alter the uptrend that we have seen developed. As of Friday’s close last week, we have the US 10-year yield up over 20 percent within a four-week period and the reaction that we have seen from equity markets falls in-line with the historic correction that we have seen. The key point I would make though, it is a correction rather than a major reversal in equity markets and that is why I still think pulling back towards 13,800-13,500 on Nifty will still be a buying opportunity and that longer-term trend should remain intact.”

He further states, “Once we start to see the rate of change on yields start to decelerate, the equity market should be able to digest that and then continue the uptrend.”

Speaking about the crude oil prices, Balanco said, “The key thing here is that we brought back into the trading range that you have through 2019 and the upper boundary of that trading range was around $73-74 per barrel area. So I think in the near-term we continue to see strength towards that range. That should be the top of the range for 2021.”

In terms of the State Bank of India (SBI), he said, “You could continue to see gains in SBI. So the idea here is in the short-term volatility that you still expect to play out that is where you can keep on adding exposure.”

Watch the video for more

(Edited by : Ajay Vaishnav)

First Published:Feb 26, 2021 2:02 PM IST