Sustainability of market rally a concern, but bet on these 4 stocks

The sustainability of the rally is a point of concern given the fact that the spread of the virus continues in a linear fashion in many parts of the world and its impact on business is getting extended. Stringent lockdown is expected to continue, distracting businesses heavily this quarter. And, the implication may get extended unless we start to get the benefit of lockdown and visible remedies in terms of control and treatment.

The market has been in a bear rally in the last one month. The Nifty50 intraday low was 7,511 on March 24 with a high of 9,391 on April 20, up 25 percent on absolute terms. The closing on April 24 was 9,154, which is up 20 percent on a closing basis.

During the week, the high volatility of crude, currencies and winding-up of MF schemes highlights the selling pressure of investors (including, corporates & retails) to reduce risky assets and go for the safety of cash.

Similar tactics were seen in the equity market, wherein India's main indices corrected by 40 percent. Now, we are seeing a second wave of correction in the financial market, which may impact equities in the future.

Having said that, the market still believes the world will win the situation and hoping that the economy will open by June-end. In that case, if this thesis is still correct that to see reversal in business post June, then the low in equity is intact in place.

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