It was a range bound session as the market took its time to digest the RBI rate cut and map out the road ahead. The Nifty gained just 10 points to close at 5,300 while the Sensex shut shop with a 34 point gain, at 17,400.
Outlook for Indian market is grim as most analyst feel post credit policy, only fourth earnings may rescue the market. Earnings too is unlikely to be encouraging as most experts are worried about.
Nitin Raheja, CIO, Rada Advisors feels that the market is really going to react to the results more than anything else. The market really has only the triggers coming from the results and are really not going to be very encouraging, a concerned Raheja points out.
"I think the markets would probably trade around this level, maybe in a small range going up and down, but I don’t see it having too much legs to take it really forward in a big way anyway," he adds.
According to Raheja, in the shorter term the market will probably hold between 5,000-5,100 on the downside as well as 5,500-5,600 on the upside.
As a trading strategy, Sudarshan Sukhani of s2analytics.com is letting open long positions. "Averaging is not a good idea ever. So, whatever positions we have or whatever positions the trader has you maintain that because pyramiding is the correct way to trade. Pyramiding is done when the trades are coming in your favour, but averaging is done when we are losing. When we are losing we will just stick to what we have, we don’t add," Sukhani explains.
However, Krishna Kumar Karwa, the managing director of Emkay Global Financial Services holds a different opinion.
According to Karwa, earnings are important, but will not be the key determinant for the market direction going forward. Karwa believes that more than earnings global flows and global sentiment will drive the market up or down further.
Karwa is betting on FMCG and pharma which outperformed the boarder markets last month.
Meanwhile, CLSA has cut its target for the BSE Sensex to 19,000 from 20,000, citing risks such as the widening current account and fiscal deficits, as well as the uncertainty over foreign taxation.
However, there are few who still regard India as an attractive shore. Goldman Sachs, for example, upgraded Indian stocks to "marketweight" from "underweight" last month, citing "relatively attractive" stock valuations.