Week ahead: Is consolidation around the corner for the mkt?

Whether that rally will sustain or not will depend on upcoming events like the passage of GST Bill in the next parliament session that will begin on July 18, a further progress of the monsoon and Q1FY17 earnings that will kick off next week with smallcaps.

July 02, 2016 / 15:12 IST

26 Aug, 2025 12:21

Volume

Todays L/H

Moneycontrol Bureau

The week gone by was quite spectacular for the market as equity benchmarks gained 3 percent after easily absorbing the Brexit event. The broader markets outperformed benchmarks with a 5 percent jump. Approval to the much-awaited 7th Pay Commission recommendations, good progress of monsoon, government initiatives to boost private sector and global central banks' promise to provide stimulus for easing impact of United Kingdom's vote to leave the European Union helped the market cross the 8300 level on the Nifty last week. Global markets also rebounded as investors do not expect Brexit to hurt global economy in the next 1-2 years.

Whether that rally will sustain or not will depend on upcoming events like the passage of GST Bill in the next parliament session that will begin on July 18, further progress of the monsoon and Q1FY17 earnings that will kick off next week with smallcap companies.

Majority of experts feel there can be some consolidation at current levels with some profit-booking in the next truncated week. They don't rule out 8500-8600 in July as there is a possibility of GST Bill getting passed in the monsoon session of Parliament.

"I don't think any of the domestic factors can lead to a major correction (of around 10-15 percent). Yes, if a poor monsoon happens and GST does not get through -- which market partly has already assumed it is going through -- we will see some disappointment, there will be some sort of disruption for the next six months but structurally [the overall market undertone] is very positive," says Vikas Khemani of Edelweiss Securities.

He believes that severe correction can be only led by a global factor.Jayant Manglik of Religare Securities says he feels that midcaps and smallcaps will be more rewarding in days to come so traders should largely focus on accumulating quality stocks with short- to medium-term investment view.