Market Volatility May Continue For Some More Days, Say Analysts

Markets may witness volatility over the next few days amid the ongoing earnings season and the upcoming Union budget, according to analysts.

Chances are that this wobbly market situation might continue for a few more days, according to Hemen Kapadia, senior vice president of institutional equity at KR Choksey Shares and Securities Pvt.

"The market is wobbly on the early chart, as there was a big upward gap yesterday and even earlier. Some of these gaps need to be covered and chances are that the market will try to make up for that and it is a possibility that (an) index like Nifty will try to cover up for that," he said.

Benchmark stock indices snapped a five-session winning streak to close lower on Tuesday after hitting a fresh record high, dragged by losses in Reliance Industries Ltd. and the information technology and realty sectors.

The NSE Nifty 50 closed 65 points, or 0.29%, lower at 22,032.30, while the S&P BSE Sensex ended 199 points, or 0.27%, down at 73,128.77.

"If I were to take a two-month view, the Bank Nifty will cross the 50,000-mark and this also means that the PSU banks won't lag behind," Kapadia said.

He is bullish on the real estate sector. "The way this sector's index has moved and the way it is poised, I believe, for the next couple of years, it is going to do well."

Kapadia's top picks are SBI, Axis Bank Ltd., ICICI Bank Ltd., HDFC Bank Ltd., Steel Authority of India Ltd. and Mahanagar Gas Ltd.

According to Sudip Bandyopadhyay, group chairman of Inditrade Capital, "We are heading into an event, which is the budget and the Q3 earnings season. So, there is a bit of nervousness, which will create some volatility."

"The metal stocks are volatile due to the strong possibility of the Chinese government giving some major subsidies or incentives," he said.

The high-end real estate market is exciting, whereas the low and medium ranges haven't, according to him. "The high interest rate does impact that segment. Once the interest rates come down, sooner or later, we will see a positive approach in the real estate sector," he said.

Bandyopadhyay's top picks are RIL, Larsen and Toubro Ltd. "If you are an aggressive investor, I would definitely recommend Punjab National Bank among the PSU banks, as the price-to-book (ratio) does look very attractive," he said.