A sharp fall in Infosys after the Q1 results led the markets down sharply by more than 600 points on Friday.
BSE Sensex is down 675 points at 66,895 points.
Infosys stocks slumped 7.7 per cent while HCL Tech, Wipro were down more than 2 per cent each. HUL also was down more than 1 per cent along with Reliance, TCS.
V. K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services said even though Nifty is at a kissing distance of the psychological 20,000 mark, Infosys can turn out to be the slip between the cup and the lip. Infosys' poor guidance of 1 to 3.5 per cent revenue growth guidance for FY 24 will drag the stock down and, perhaps, Nifty with it since Infosys has a 5.9 per cent weightage in the index.
The lacklustre performance of HUL with a meagre 3 per cent volume growth in Q1 can be another drag on the market. However, the relentless FPI flows, which are overwhelming everything else now, have the potential to take the Nifty to 20,000 level soon. Nifty Bank can provide support to the rally, he said.
Investors should keep in mind the fact that at the current Nifty PE of above 20 based on FY 24 estimated earnings, there is no valuation comfort in the market.
Barring the US, India is the most expensive market in the world now, Vijayakumar added. At high valuations, some negative triggers can lead to sharp correction. But in the near-term the party may continue.