The market bias is expected to be negative this year, say experts

The benchmark indices seem to have managed to hold ground, but the overall market breadth has been weak in 2018. The advance-decline ratio for the broad-market BSE 500 index has been deeply in favour of declines in four out of five months of this calendar.
 

In May, there were three stocks declining for every one advancing, even as the BSE 500 index fell less than two per cent. The trend was largely similar during the first three months of the year. 
 

In April, however, when the markets saw a sharp rebound following a 10 per cent correction in the preceding two months, the market breadth was strongly in favour of advances. Market experts say, the market bias is expected to be negative this year due to headwinds such as rate hike forecast in the US, weakening of the rupee, the surge in oil prices and political uncertainty. 
 

Also, overall earnings for the March quarter have fallen short of expectation. This year’s advance-decline trend is in sharp contrast to last year when BSE 500, BSE Midcap and BSE Smallcap indices outperformed the benchmark Sensex by a large margin. “One has to be careful with stock picking. The chances that your bets will go right will not be as high as last year,” said an analyst.