After correcting nearly 1,700 points for the last two months, the equity market bounced back on some bargain hunting at lower levels, following the falling prices in crude oil prices and improvement in the liquidity conditions in the non-banking finance companies and housing finance companies space.

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The Nifty 50 Index after touching a low of nearly 10,000 bounced back to 10,600 levels in the last two weeks. Concerns over the wealth of the Indian economy following the rise in oil prices, depreciating rupee, rising fiscal deficit, concerns over corporate earning, external factors such as the ongoing trade war between US and China and the strengthening of the US dollar were responsible for the sharp correction in the equity market that saw massive selling particularly by the foreign institutional investors (FIIs) to drag the Nifty 50 index by 1,700 points. In September and October 2018, foreign investors sold close to Rs 40,000 crore of Indian equities.

However, with oil prices cooling-off from the peak of $87 per barrel to about $70 in the last couple of weeks on increase in global supply has been a big positive for the Indian market. The fall in oil prices has been due to the rising supplies and concerns over demand. In fact, with US granting exemptions to Iran's biggest buyers and allowing them to buy limited amount of oil for another six months, along with supplies from other large producers like Saudi Arabia, Russia and Shale Gas companies in US have helped the oil price to fall to the level of $70 per barrel that was last seen in April 2018. Back home, the easing of liquidity conditions for NBFCs and HFCs has also helped to improve sentiment towards the market. Even corporate earnings of India Inc have met the street's expectation.

While market bounced back after being in oversold zone, whether it will continue its upward movement is questionable. D-street will keep a close eye on the Reserve Bank of India (RBI) board meet on November 19, 2018. Market would like to get a sense on the growing differences between the government and the RBI. One should wait and watch on the development. Concerns over the US and China trade war still looms over the market, any relaxation should go well for the market. Meanwhile volatility in the market will continue till state elections and any view for long term should be taken after that event. However a short-term trader could look to buy on dips.

The writer is head- privilege client group, Reliance Securities