New Delhi, March 4
While a clear bullish trigger is yet to emerge, historical patterns, technical indicators, and sectoral valuations suggest that the Indian market is nearing a medium-term bottom, a report showed on Tuesday.
Therefore, "we would advise investors to allocate some long-term money between 21,700-22,000", said Axis Securities in its 'India Equities Exclusive Report'.
"While most of us can’t catch the exact top and bottom, prudent investing is about cashing in on opportunities, especially when sentiment is so one-sided. One such opportunity is now," the report mentioned.
Valuations across sectors are below their one-year and five-year averages, indicating pockets of potential opportunities for long-term investors.
The Nifty 50 index has experienced a significant decline of around 16 per cent from its September 2024 peak of 26,277, marking the sixth-largest drop since the 2008-2009 Great Recession and the second-largest since the Covid-led crash in March 2020.
This five-month downtrend, last seen in November 1996, has raised concerns about a potential bear market.
The Nifty has entered a critical support zone defined by the 100-week Moving Average Envelope (+/-3 per cent), which has historically contained declines except during extreme events like the Covid crash. This suggests proximity to some sort of a durable bottom.