Market is likely to continue in the consolidation mode for a couple of days more and then take a new directional trend starting April, says V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
The undertone of the market continues to be bullish supported by strong economic fundamentals
A significant structural trend in the market is the sustained flows into equity mutual funds which are gathering momentum. This will ensure resilience of the market with dips getting bought, he said.
Mid-caps have again become the segment of activity, particularly by retail investors. This is because there is no institutional selling pressure in midcaps unlike in large caps where institutions including FIIs have large holdings, he said.
Financials are likely to lead the rally along with capital goods and automobiles in early April. Credit growth in the economy is impressive at around 20 per cent and this will help boost banks’ profitability. Q4 results of banks will be good, he added.
Deepak Jasani, Head of Retail Research, HDFC Securities, said stocks in Asia were mixed on Wednesday breaking ranks from Wall Street as the market rally in the US continued to cool. US stocks surrendered gains in the final 30 minutes of Wall Street trading on Tuesday to close lower for the third straight day, with investors rebalancing their portfolios after a $4 trillion rally this year. With the equity outperformance, pensions would need to sell roughly $22 billion in global stocks and buy $17 billion of fixed income in order to return to prior asset allocation levels, according to a recent estimate from Morgan Stanley. Cocoa futures surged above an unprecedented $10,000 a metric ton on Tuesday before erasing gains and taking a breather from a historic rally that has seen prices of the key chocolate ingredient double this year.
BSE Sensex is trading at 72,985.62 points, up by 515.32 points, on Wednesday. Maruti is up 3 per cent.
