Covid-induced market correction to likely continue: Credit Suisse Wealth

The ongoing market correction triggered by a spike in covid-19 infections is likely to extend, says ‎Credit Suisse (CS) Wealth Management.

“We believe the equity market could see some further profit booking in coming weeks, but we expect this correction to be very sharp and to not last long,” said strategist Jitendra Gohil and Premal Kamdar at the investment advisory firm in a note.

The benchmark Sensex on Tuesday closed at a near three-month low. The index has come off by more than 8 per cent from its all-time high of 52,104 on February 15.

“While the concerns over rising bond yields and strengthening of the USD have somewhat abated over the past couple of weeks, worries over a precipitous rise in coronavirus cases in India and a macro slowdown have resurfaced,” the note added.

CS Wealth is recommending investors to look at market corrections as a buying opportunity from a six- to nine-month perspective. “We continue to prefer cyclicals over defensives and mid-caps over large caps as we believe the growth could rebound sharply in the H2 FY 2021.”

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