Sensex hits 60,500 in volatile trade; analysts say correction imminent

Benchmark indices were volatile in Tuesday’s session as traders weighed the possibility of a strong December quarter earnings season against rising Omicron cases and likely US Fed rate hikes.

US Federal Reserve Chairman Jerome Powell’s prepared opening remarks released before the Senate hearing today suggested he will pledge to prevent high inflation from becoming ‘entrenched’. The remarks strengthened the view that the Fed rate hike is coming, as soon as March.

Further, analysts see high volatility and imminent correction going ahead.

“The unbridled speculation in low-grade stocks, the cats and dogs, is concerning. “Flying cats and dogs” is an indication of an imminent correction. Chasing cats and dogs has always ended in grief. Therefore, investors have to be careful and stick to quality. Nasdaq which was 3 per cent lower in early trade yesterday, ending in positive territory, is an indication of highly volatile days ahead,” said Dr V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Source:The Economics Times