Is now the right time to enter the market? Overall Market View.

We all know the present issues which is causing the market to fall and corrected around 10 percentage from the peak this year, so i did the research and i like to share about how market reacted in the previous similar time scale and finally what is my opinion.

 

I agree every situation in any given period in the stock market is unique but worth to look back for clues.

 

I found five similar incidents in the stock market in the last 10 years, i am listing it out here so we can see how market reacts,

 

First crimxx annexure in 2014 during february and march

Second Doklam standoff

Third again standoff in may june 2020

and finally fed interest rate hike which we can divide that into two,

Initial interest rate hike in december 2015 that is from 0.25 to 0.5 and

Periodic interest rate hike from 0.5 to 2.5 in the span of 2 years.

 

First crimxx annexure

Nifty 50 Chart

The graph shows the nifty's reaction during january to may 2014. during jan 2014 nifty peaked after the rupee crunch in 2013. then the uncertainty about the annexure was happened in february 2014 so the market corrected 8%, in the march 2014 the anecdote was completely finished but the market didn't react at all it was on the rally by expecting the new government in may 2014.

 

Second Doklam standoff it happened between june to august 2017

There are two major incidents happened during standoff in both the time the market corrected 5% and 8% respectively then continued the rally. same happened in may june 2020 standoff during the two major incidents market corrected five and three percentage respectively and then continued to group, as it was already trading in very low price compared to the potential economy of the country.

 

Now the interest rate hike

Almost for six years from 2009 to 2015 fed kept the interest rate at constant 0.25 but during 2015 the whole year investors always had the fear of increase in the interest rate hike as Mr. PR. Sundar says always market take the bad news and good news but not uncertainty, so from the new government rally happened during the year 2014 the market corrected 20 percentage till the interest rate hike in december 2015 and another 10 percentage until the end of the financial year.

 

Then the final one periodic interest rate hike from 0.5 to 2.5 percentage atthe rate of 0.25 every two months approximately as we all know in december 2016 is when the demonetization was happened though the market didn't care it just keeps on increasing so that's all the 5 related global incidents and our stock market reactions.

 

So, what's my take?

At present whole indian stock market cap is 3.15 trillion us dollars which is 96 percent of the indian gdp, now based on imf october 2021 world economic database india's current gdp is 3.25 trillion us dollars it is expected to increase 3.5 trillion us dollars in 2023. these are the other two bars if rupee maintained 75 and 80 rupees with respect to one us dollar which i think it will then the eat new gdp in 2023 will be 3.7 to 3.8 trillion us dollars as per the market cap to gdp ratio if anything goes below than 90 percentage then the market is considered as undervalued.

Nifty 15000 is equal to 90 percent of the indian current gdp and the 85percent of 2023 countries gdp, so i don't think this any time this year nifty will go below 15000 again it is my opinion it may go down i don't know financial year completion effect in march i think the market is down because both DII and FII in order to clean the book by offloading the bad stock they are utilizing these opportunities because of all those reason at present.

 

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Everything in this blog's news and technical analysis is solely for educational purposes.
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