The uncertainty associated with the Israel-Hamas violence continues and it can take a turn for the worse if Israel starts ground operations in Gaza, says V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
"The possibility of easing of tensions also cannot be ruled out since Hamas will bargain with the captured Israeli hostages. Unlike economic and market trends, geopolitical developments cannot be predicted. This uncertainty will weigh on markets," he said.
On the economic front there are some positive developments. The decline in the dollar index to 105.95 and the US 10-year bond yield falling to 4.65 from the recent high of 4.88 are positive developments for equity markets, he added.
Even though FIIs continue to sell in India, the intensity of selling is coming down. More importantly. DIIs are increasing their purchases.
Calibrated buying in small quantities in quality stocks in banking, automobiles, IT, capital goods and real estate/construction would be a good strategy for long-term investors, he added.
Anand James, Chief Market Strategist at Geojit Financial Services, said though the downside gapped opening on Monday failed to cascade into a collapse, the close below 19,600 suggest that the regrouping of bulls has not been strong enough.
“We will look for sustained trades above 19,545 early today to nurture hopes of getting back to the 19,900 trajectory. Else, expect the ongoing weakness to persist and aim for 19,180 with hopes of 19,340 attempting a pull back midway,” he said.
BSE Sensex is up 364 points at 65,876 points on Tuesday. Bharti Airtel is up more than 2 per cent.
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