Greetings friends!

In my previous post I had wrote about the possible reversal of the nifty50 index. Definitely, there was a sharp and steep rise in the Indian stock markets because of aggressive buying of FIIs. But the rally was not driven by the change in the fundamentals of the markets. It was a short-covering driven rally and was not stable.

Market faced resistance at the top level and then reversal started. However, it must be kept in mind that this rally is not over yet. Market came down to fill the gap and it may further go up or down depending on multiple situations. If crude price increases because of Iran war, then market will definitely face a pressure and will eventually come down. But if the crisis solved, Government of India decreases or remove the long-term capital gain tax, etc. then the market may make new highs. Government has not yet announced that LTCG will be cut. If it refuse to do so or delay the decision, market may see this as a negative signal and may fell down further.

Inflation in India has also increases above the tolerable limit. So, there is a risk of increase in interest rest by RBI - the central bank of India. Other external factors like increase of the US bond yields, rise of interest rates in Japan etc., can pull back the market. So, before investing in large quantities, it is prudent to act cautiously. Investors should not get excited by just seeing the index going up. Other internal and external macroeconomic factors should also be checked before investing.

This is not a financial advise. Please invest wisely and study hard to get a knowledge before investing.

**Thank you!**