The S&P BSE Sensex suffered a knee jerk reaction which took the index below 32,000 levels on Tuesday while Nifty slipped below its crucial support level of 10K after market regulator released names of suspected shell companies.
Securities and Exchange Board of India (Sebi) highlighted names of 331 suspected shell companies as identified by the corporate affairs ministry.
According to BSE, trading in all such listed securities shall be placed in Stage VI of the graded surveillance measure (GSM) with immediate effect.
But, at best, this could well be a knee jerk reaction and it does not change the trend of the market. The Nifty50 index has strong support near 9980-9950 levels and any dips towards these levels should be used as buying opportunity because the rally is likely to continue.
Indian market reached new heights in the year 2017 with gains of over 20 percent and with liquidity remaining strong, the rally is unlikely to end anytime soon.
There is another big factor which is giving comfort to the bulls and that is valuations comfort. There are no serious signs which suggest that valuations are staring at high levels which mean that there is still room for further upside in the market.
