Should You Boost Your Mutual Fund SIPs To Benefit From The Market Downturn ??

 Today, the Nifty 50 index hit a low of 15,293 that is greater than a year old.

Both indices experienced losses for the sixth straight day as the NSE Nifty 50 today index dropped 0.44 percent to 15,293 and the S&P BSE Sensex dropped 0.26 percent to 51,360.42. The U.S. Federal Reserve increased interest rates by 75 basis points throughout the week, which resulted in losses for the blue-chip indices of almost 5.5 percent on average.

Both indices experienced losses for the sixth straight day as the NSE Nifty 50 today index dropped 0.44 percent to 15,293 and the S&P BSE Sensex dropped 0.26 percent to 51,360.42. The U.S. Federal Reserve increased interest rates by 75 basis points throughout the week, which resulted in losses for the blue-chip indices of almost 5.5 percent on average.

The synchronised global monetary tightening and the ensuing concerns of an economic downturn are the main themes affecting equity markets globally. Now, there is a considerably greater chance of the US entering a recession. Markets are undervaluing these worries. Currently, the S&P 500 PE is close to the long-term average of 16, or around 16. Trading in Europe is about 11 times. The market will bottom out before the economy, "the chief investment strategist at Geojit Financial Services, Vijayakumar. 

"Valuations in India have fallen but are still higher than the long-term norm. FPIs will therefore continue to sell, capping a possible relief rally "he added.

Market trembling, according to analysts, is being brought on by foreign investors selling, as well as worries that aggressive monetary policy tightening could harm the economic recovery. After selling net $5.18 billion worth of Indian stocks in May, foreign investors have pulled out a net $3.64 billion this month.

"The market is being forced to undervalue the likelihood of a recession by rising inflation and tightening monetary policy by international central banks. We can anticipate FIIs to continue their selling spree given that central banks' policy stance favours further rate increases of greater size. However, the ongoing corrections are opportunities in disguise for medium- to long-term investments. The domestic market will continue to trade with significant volatility in the near future "said Vinod Nair, Geojit Financial Services' head of research.

Nifty technical outlook :

Deepak Jasani, Head of Retail Research, HDFC Securities ;

After the current downturn on June 17, "Nifty dipped and formed a doji, signalling likelihood of an upward reversal. This comes after a week-over-week decline of 5.6%, the largest since May 2020. Thus, the June 17 low (15183) will be important, and on increases, resistance might come in the form of 15335 and 15659.

Nagaraj Shetti, Technical Research Analyst, HDFC Securities ;

"Over the past 14–15 sessions, the market has been in a strong downward trend. The current abrupt downturn is the outcome of minor consolidations or tiny upside bounces. Therefore, any upward recovery from here could present a short-term sell on rise opportunity. On the upside, the region around 15600 levels (the middle of Thursday's lengthy bear candle) is anticipated to be a significant overhead resistance going forward and is not likely to be broken quickly. The Nifty could decline in the near term to the 15000-14800 levels after a minor positive rally.