Jan 11, 2017 04:46 PM IST | Source: CNBC-TV18

Experts upbeat on Nifty but cautious on Bank Nifty

With worries over the impact of demonetisation behind us, Mehraboon Irani of Nirmal Bang Securities expects the market to strengthen at least temporarily until Budget to the levels of 8700-8800.

It was a good going for the market, which saw a massive breakout. The Bank Nifty provided a huge support to the Nifty. The Sensex closed up 240.85 points or 0.9 percent at 27140.41 and the Nifty closed up 92.05 points or 1.1 percent at 8380.65 and the Bank Nifty closing 420 points higher at around 18830.

Mehraboon Irani of Nirmal Bang Securities believes for the time being the market may strengthen further to the levels of 8700-8800 – maybe before the Budget on the back of hope and the fact that negative impact of demonetisation is behind us.

However, this does not necessarily mean the market has bottomed out for good because world market is skewed in favour of US market. Going forward, US is going to shine brightly, the dollar index is likely to peak out and when that happens the rupee will fall and the market too could correct. When the market corrects, it would be the right time for portfolio buying for the long-term.

SP Tulsian of too is upbeat on the Nifty till the expiry but is cautious on the Bank Nifty. According to him, currently, the Bank Nifty is giving solid support to the Nifty but going forward from Friday onwards, one should be cautious on it.

However, sector rotations will keep supporting the Nifty, says Tulsian.

Tulsian says Bank Nifty has already risen about 1000 points since last Wednesday and now there is no fundamental reason for it to keep going up. “For the next one week, I will cut all my long positions in the bank stocks both in the private sector or public sector,” he adds.

According to Ashwani Gujral of there is no momentum in Bank Nifty buying now that it is above the 50-day moving average. So, it is a buy on all declines.

Rahul Singh of Ampersand Capital believes some sectors and spaces in the economy have withstood the impact of demonetisation much better in December than November as witnessed in the some discretionary spend numbers for December. So, on back of that one could see the market bounce back.  

However, there is also a technical angle to this bounce back - the FII selling which was to the extent of USD 5 billion in November till date was totally absorbed by domestic buying. The domestic flows have supported the market and have helped in its buoyancy.

Going in to the Budget, market is likely to see a pullback rally but one is unsure of how sharp or swift it would be, says Singh.

For the entire discussion, watch video
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