Nifty, which had rallied close to 500 points in the run-up to the credit policy, is seen trading in a wide range of 5500 to 6000 in May, experts said.
"I will be keeping my view of 6000 as a strong resistance for May series with a downside or maybe a low of around 5650-5700. So, overall cautious to negative view for whole of May series going forward," SP Tulsian of sptulsian.com told CNBC-TV18.
Agreeing to him Sanjay Sinha of Citrus Advisors said that going by the visible set of factors the range of the market is going to be defined by downside range of 5500 points, plus or minus 50 and the upside of about 6000 points.
Experts believe that correction in Bank Nifty may restrict broader Nifty to rally from the current level. “The Bank Nifty seems to be suggesting that the bulls are losing control. If that is so then the prospect of a sustained rally from this level in the Nifty is not available as of now. This week the markets should be choppy and we will find out probably that a trading range is developing already and where the market wants to go,” Sudarshan Sukhani of s2analytics.com said.
Also read: Mkt entering choppy waters; Bank Nifty to fall more: Pros
Tulsian also has a negative view on the Bank Nifty. He believes that it may not move beyond 13,000. “I won’t be surprised to see it correcting sub 12,000 in this series for whole of May. For May, I am expecting a level of about, maybe a good support at 5650 with resistance at 6000. The moment you see 6000 crossing which we have seen last week also, the profit booking comes in. It is very risky create long positions beyond 6000,” he added.
Bank Nifty today ended flat at 12,396.40 after a volatile trade since morning post media website Cobrapost once again alleged prestigious banks facilitating money laundering. Cobrapost today alleged that 23 banks including public sector banks like State Bank of India and Punjab National Bank and insurance companies allowed money laundering.
On Friday Bank Nifty lost 2.5 percent while BSE Bankex was down 2.4 percent after RBI cut repo rate by 25 basis points in its annual policy but said that there was very little scope for futher monetary easing.
Parliament logjams, RBI’s hawkish tone, pressure on twin deficit have been key worries for market participants. Although FII (Financial Institutional Investment) have been impressive since the beginning of current calendar year, there is a fear that they may wane from our markets in absence of any significant action on monetary, and policy reforms side.
Sanjay Sinha of Citrus Advisors said that India has received Rs 60,000 crore of investment in the first four months of calendar year, but the money that has come in has not made any appreciable gains as market performance has been flat more or less. He is however hopeful that India will continue to receive it fair share of investment from FII, but whether India will get a separate allocation over and above the allocation to emerging markets is questionable.
On stock indices performance he preferred to have a more optimistic view than others. He said, “We should not forget the rally that we have seen in the market build up from the early part of April was sparked by the sharp fall in commodity, crude and gold prices. If this is going to be the trend going forward we should anyway have a case for the market to be moving up based on these factors alone even if the politics or the economic front does not perform.”