Market today had a bad session when Sensex closed at 18223 down by 264 points and Nifty lost 76 points to close at 5463. Markets opened lower in the morning and traded weak throughout the day. Market breadth was extremely weak and selling was witnessed across the sectors. Though, market saw some buying interest in the later part of the day which helped it in recovering from its lowest points of day.
Traders are not sure if there is more bloodshed to happen. Stock markets have been trading weak for some time now and situation is getting worse by day. Earlier in other countries like Egypt and now in Libya, situation doesn’t seem to be moving out of control. Crude is trading high and unrest in oil producing nations is now threatening the supply side of it. No one knows how much time things may take to settle down?
Shortage in crude supply will significantly change the equation for stock markets. As per a recent news, United State is planning to tap is crude reserve. This news is big enough to shake stock market. It signifies the threat which the current civil war in Libya is posing to the global crude prices. If supply side is further choked then, markets will tank further.
Domestically, congress DMK coalition is going through a rough phase and news of their separation has been doing round for some time. This is also not good for the markets stability. These two factors together are big enough to disrupt the market in short term.
This may pose a very good opportunity for the long term investors to buy the blue chip share at a discounted price. This is really a very good time for stock pickings. Investors can look for good stock ideas and can refer to their brokers for stock picks. In the short term, strategy can be trade in Options. But one need to very careful while trading in Options.
These are good times for buying or selling Call Option and Put Options. Investing in Exchange traded fund will also help investors in reducing their risk.
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