Equity markets are experiencing a range-bound movement from the start of the current year, along with the Nifty 50 oscillating in a rising channel, according to Aditya Agarwala, head of research and investment, Invest4edu Pvt.
When the markets made a correction, it's been in a range of 3.5% to 4%. Every time, the market corrects from this range, it bounces back and makes a new high, he said. “Markets will inch higher from here on, though there may be volatility in the up-move.”
The immediate target on the upside would be 22,350 and by the end of the next election phase, the markets could see an upside at 22,450/500, Agarwala said. He is positive about Bank Nifty and the metal segment.
Nifty is now approaching the hurdle zone of around 22,300, which might lead to a pause or a resumption of a corrective phase, according to Ajit Mishra, senior vice president of research at Religare Broking Ltd.
However, a decrease in volatility can limit the decline, Mishra said. "The mixed sectoral trend presents opportunities for traders on both sides of the market, so it's important for them to plan their positions accordingly."
The NSE Nifty 50 closed 113.80 points, or 0.51%, up at 22,217.85, while the S&P BSE Sensex ended 328.48 points, or 0.45%, higher at 73,104.61.
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Due to the heavy sell-off by foreign institutional investors and the ongoing general elections, G Chokkalingam, founder and managing director at Equinomics Research, is skeptical about buying defence stocks.
Chokkalingam recommends that investors wait for the elections to end, as in the next four years, he expects the market capitalisation to mount up from Rs 400 lakh crore to about Rs 700 to 800 lakh crore. “I prefer to play safe and not recommend buying defence stocks,” he said.
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