Sensex set to make a comeback next week

After more than four per cent fall last week, Sensex is likely to bounce back and may regain the 21,000-mark in the coming week on smart corporate earnings and strong India growth story, say analysts.

The Bombay Stock Exchange’s benchmark Sensex plummeted by 848 points or 4.03 per cent last week on the back of negative global cues, poor industrial growth numbers and the sell-off in the blue chips.

Market analysts feel that the weakness in the Dalal Steet is the over-reaction to the negative news from the Asian and European peers and describe the fall as a “buying opportunity” for the investors.

“Stock markets should see handsome value buying at lower levels. The negative news has been absorbed by the market and we are likely to again see the 21,000 mark in the next few trading sessions with buying across the board,” CNI Research CMD Kishore P Ostwal said.

The market last week also faced tight liquidity due to the central transmission utility Power Grid’s follow-on public offer, which was subscribed 14.83 times, reflecting the positive market sentiment, said an expert. In the coming days, investors will start getting back the refund of the money parked in the FPO, which will also improve liquidity in the secondary market.

“The macro-economic picture still remains strong, which will lead to a smart and steady recovery in the stock market. Last week’s correction was expected as the market was in an overbought zone. We will definitely see a spurt in buying in the stocks,” Unicon Financial Services CEO Gajendra Nagpal said.