More Correction Ahead ? The Truth Behind This Week’s Volatility

Markets Overview

This was a week where there was anticipation that the ongoing war might reach some kind of conclusion, but that does not seem to be the case. Both sides are still actively engaged, and there is no major negotiation in place. Consequently, the situation will end when it ends, but there is currently no end in sight.

After having run up for the last almost two weeks, Nifty started to move down this week. The market is down 1.87% this week. In the context of the last three weeks, it is still not looking bad because there was a managed move up of almost 2,300 points in a straight line, and giving up some part of that gain is almost natural.

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IT stocks are currently cause for concern as a meltdown is unfolding, led by major players like Infosys and TCS. More than 1 lakh crore of market cap was wiped out across these stocks combined. The long-term chart of the IT sector is not looking very encouraging. While there was a point at the start of March where a credible pullback seemed to be building, that effort was smashed down, and the sector is now approaching a multi-level, multi-year support line very soon. If that breaks, hope will fade, although chaos is already present.

Market charts, which looked very nice until three days back, have now turned down. A gap created previously was filled today. It was not a complete washout day, but there were significant losses of 1.14%. The best hope is that the market does not break into this gap; otherwise, it will head below 23,000. Hopefully, some turn will be seen here. The war in the Middle East does not seem to be ending, with new attacks on Lebanon.

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Rebalance Update for the week

Dear Weekend Investors,

A special rebalance has been triggered in Mi Evergreen, Mi Allcap Gold, and Mi NNF 10 due to the recent corporate action (demerger) in VEDL.

Investors are advised to rebalance their portfolios on Monday to stay aligned with the updated strategy.