Expect Markets To Pullback Soon, Say Analysts
The benchmark indices plunged during early trade before paring losses to close higher on Thursday.
Markets have recovered from Wednesday's selling pressure but there may be volatility in the market and rangebound movement, according to market analysts.
They are nearing the higher end and Nifty will soon cross the 21,500 mark and touch 22,000, according to Kunal Shah, senior technical and derivative analyst at LKP Securities Ltd.
"We are of the view that as long as the market is trading above 21,180/70,600, the pullback formation is likely to continue," said Shrikant Chouhan, head of equity research at Kotak Securities Ltd. "The current market texture is volatile. Hence, level-based trading would be the ideal strategy for day traders."
"...Markets are likely to move in a range as investor participation is expected to gradually decline globally ahead of Christmas and the New Year holiday," Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services, said.
“Banking—in itself—both private and public sector undertakings—is the major industry that will help in picking up momentum in the markets,” Shah told NDTV Profit.
Private banks like HDFC Bank Ltd., ICICI Bank Ltd. and public sector banks like SBI, Canara Bank and Bank of Baroda are some of the large-cap names that are witnessing a positive run. This will help give a push to the Bank Nifty index, he said.
Shah also said that good momentum can be built in the fast-moving consumer goods sector. According to him, shares of Hindustan Unilever Ltd. may see an upside of 50–100 points.
The benchmark indices plunged during early trade before paring losses to close higher on Thursday, as HDFC Bank Ltd., Reliance Industries Ltd. and Kotak Mahindra Bank Ltd. led the gains.
The NSE Nifty 50 ended 105 points, or 0.50%, higher at 21,255.05, while the S&P BSE Sensex closed 359 points, or 0.51%, higher at 70,865.10. Earlier in the day, the indices posted their worst opening in two months.
Amid the backdrop of multiple IPOs getting listed this week, Mayuresh Joshi, head of equity research at William O'Neil India, told NDTV Profit that while the subscription numbers for the IPOs are humongous, the valuation at which they are being traded is not sustainable.
“There is a huge mismatch happening at this juncture. Valuations are out of whack. They are not able to sustain the earnings momentum (the rate) at which multiple stocks are opening,” he said.
Disclaimer: The views and opinions expressed by the investment advisers on NDTV Profit are of their own and not of NDTV Profit. NDTV Profit advises users to consult with their own financial or investment adviser before taking any investment decision.
