Sensex, Nifty rangebound; Cap Goods, Metals indices up

Moneycontrol Bureau11:45 am FII view: Making no bones about the government’s demonetisation drive Helios Capital Management Founder Samir Arora said it will take about 6-12 months for a recovery to take place. Even though the move has been timed right, the shock to the system is huge and demonetisation won’t solve it in 3-6 months, Arora said. He, however, pointed out that the financial regulation took away momentum that the consumer space had. In the past 4-5 years, investors didn’t make money in sectors such as realty, pharma and IT; only consumer stocks were profitable and demonetisation has blown away that advantage with demonetisation, Arora said. He cautioned that it will be tough to get that momentum back in 6 months.11:30 am Market outlook: Speaking to CNBC-TV18 Saurabh Mukherjea of Ambit Capital said that we have been accused of saying a lot of things that are thought of as sensational but facts and subsequent events have borne them out. He was responding to Ambit's report that had estimated that GDP growth will trend down from 6.4 percent in the first half of this fiscal to 0.5 percent in the second half with likelihood that growth would shrink in the third quarter of this fiscal. He said PM Modi is clearly ringing in the changes and India will go through structural changes that will reduce black money, cost of capital and cost of land and real estate. However, he warned that such measures will entail short-term pain. He believes the real action will begin next year as some SMEs will realise they can’t function in an environment where they have to pay full taxes. They will start winding up next year, he said.Don't miss: Buy, sell, hold: How to invest in 2 major infra stock post Q2?

After a brief rally, the market continued to slip. The Sensex is up 78.69 points or 0.3 percent at 26039.47 and the Nifty is up 17.45 points or 0.2 percent at 8019.75. About 1423 shares have advanced, 682 shares declined, and 107 shares are unchanged.

L&T, Asian Paints, Tata Steel, Lupin and Sun Pharma are top gainers while HDFC, Wipro, BHEL, Maruti and GAIL are losers in the Sensex.

Gold prices were up by Rs 59 to Rs 29,162 per 10 grams in futures trade today as speculators raised their bets even as metal weakened overseas. Market analysts attributed the rise in gold prices at futures trade to widening of positions amid a better trend in precious metals overseas.