The global bear story is exactly panning out as we have been writing in this column from the last 1 month. The only thing we were still waiting to see is the midcap story getting hit and we are still confident that the sell-off will spread to midcaps and then there goes a period of consolidation.
Wall Street was massacred yesterday with the mainline indices losing in th range of 3-4 pct each. Asian markets are trading inline with the US markets on Friday morning. sliding by 2-4 pct.
Our major support level for Nifty is very likely to be tested today and we expect a strong rebound today. Given the vigorous attack one needs to see whether 4800 level holds. Below 4800 we are afraid to write that it will be massive panic and no bounce in sight.
We were wrong as we were bearish from 3 to 4 months but one needs to have patience in these markets. We have always written markets are stretchy and sketchy. Also Indian markets including every TV channel or any website failed to talk about Soverign debt issues. We raised the same in April and mentioned we will be taking a bigger hit in May.
This is just a temporary but much needed setback (healthy correction) for Indian equities. Do not rush to buy if equities appear cheap as you will get a better price soon