Even as the markets are trading at record levels, the rally is being led by limited stocks, said a market analyst.
Even as the markets are trading at record levels, the rally is being led by limited stocks, said a market analyst. Apart from IT stocks, no other sector has helped the market to near 12,000-mark, Gautam Shah, associate director and technical analyst, JM Financial told CNBC TV18. A weakness could be seen in the major sectoral indices including banking, FMCG, oil and gas, he also said, adding ITC and other top FMCG stocks seem weak. The markets may find resistance at the higher levels and it appears difficult for Nifty to sustain beyond the levels, he added. “If at some point Nifty breaks 11,600, which is our view, chances of 4-5 percent dip is likely. So, rallies must be used as selling opportunities,” he noted.
Bank Nifty is an important index to monitor currently, he added. In case of the index breaking the 30,500 levels, it could open a 5 per cent drop for the index, he added. “Within the Bank Nifty, the top 3-4 private banking names have started to look overbought after a long time,” he said. It would be good to book profits in them now, Gautam Shah noted.
Meanwhile, the domestic benchmark equity indices surged more than 150 points in early trade Wednesday tracking gains in ICICI Bank, L&T and RIL, amid heavy foreign fund inflow. On Tuesday, the BSE Sensex ended 311.98 points, or 0.80 per cent, higher at 39,434.94; and the NSE Nifty surged 96.80 points, or 0.83 per cent, to 11,796.45. A positive momentum has been triggered in domestic stock market as monsoon swiftly progressed towards central and north India, the market experts said.