Markets closed flat for the week. Nifty managed to close above 9850. Sentiment is cautious. Some of the counters are still under the bear grip and recent fall has done a lot of damage. N.Korea war talks, Japanese sanctions on N.Korea are some of the events markets are living through. Indian markets are witnessing one of the biggest FII selling seen in recent times. DII flows continue to support the market.
Technically speaking 9750 is the two-week low Nifty has made. This level unless breached should provide adequate support in the days to come. Conversely if 9750 is breached 9500 is inevitable. The market should remain range bound with undertone being bearish. Fresh positive triggers are not in sight however markets will keep finding negative triggers.
Fundamentally speaking we are still at historic highs. Most of the indices all across sectors are trading at stretched valuations. A 10-15% correction will do no harm frankly speaking. Having said that liquidity is robust and hence till flows are strong such correction doesn’t seem in sight.
Global markets are in similar shape. DOW is steady below 22k however given the geopolitical tensions a correction can drag it lower. World over markets are in wait and watch mode as things unfold in the N Korea v/s the world issue.
Sectors to watch – again Pharma companies will see some steady trading. Bottom fishing can be done in this sectors. Stocks like Dr Reddy’s, Lupin and Sun Pharma are heavy weights which will see interest. Nifty pharma index can scale to 10k soon. Metals are the strongest sector in play currently. Nifty metal index can scale to higher levels given market stability. Overall markets are going to be range bound given the over all situation. Unless fresh triggers the Nifty range for the expiry week should be 9750-9950. Either side breakout will give fresh legs to momentum.