market outlook: Market caution in September series; avoid leveraged bets, says Amit Jain

“We are cautious on the September playoffs, both from a technical standpoint and from a global event risk standpoint,” says Amit JainCo-founder, Global Ashika Family Office Services.

In an interview with ETMarkets, Jain said, “Investors can choose select mid and small cap stocks with their risk appetite in mind. Since mid and small caps are more likely to correct themselves with NIFTY as well, if we have -ve news feeds from global markets,” edited excerpts:

A volatile week for Indian markets and the bears largely remained in check. What led to the price action?
Yes, last week the bears were in control of the markets. This trend could also continue next week due to the uncertain outcome of the Jackson hole meeting last Friday.

This price correction was in line with expectations as markets were in the overbought zone around [email protected] This expected near-term correction could be a good entry point for investors who missed Nifty50 at 15200.



What is your view on the expiry of the August series and where do you see the markets heading in the September series? How are FII placed?
The August series was great for the market as it builds on the gains from the July series. The Nifty50 has already risen 18% from the June lows in the past two months, therefore we are cautious on the September series from both a technical standpoint and from a market risk perspective. global event.

So far, FIIs have been positive in spot markets, but that could change with any negative news flow from global markets.

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Nifty recorded Gold Crossover of EMA on the daily charts in August. Do you think this lays the foundation for new records in the September series?
Yes, Nifty50 recorded a golden EMA crossover on the August series daily charts, but in September we have a crucial US Fed meeting, where interest rates could rise further, this which poses a near-term threat to global stock markets.

In the September series, investors should avoid any leveraged positions.

Sector-wise, which sectors should remain in action (strong and weak) in the September series?
In my view, the banking and IT sectors could face some heat this week, but the FMCG and pharmaceuticals sectors could be supportive. In the global series, we are cautious about the broader market keeping in mind the broader geopolitical risk.

The IT sector fell more than 3% in the past week. What led to the price action, and do you think the weakness will continue into the September series?
Yes, the IT sector is more globally related, therefore, it will replicate the performance of the NASDAQ 100 during the September series. This week could be more biased towards the negative side of the IT sector.

Small and mid cap stocks bucked the trend – how should investors play the broader market theme in the September series?
Investors can choose mid and small capitalizations selected taking into account their risk appetite. As there are more chances that mid and small caps will also correct with NIFTY if we have -ve news feeds from global markets.

The main actions to watch?
FMCG and pharmaceutical stocks can be a good bet for the September playoffs.

(Disclaimer: The recommendations, suggestions, views and opinions given by the experts belong to them. These do not represent the views of Economic Times)