Experts say highs to stay, be cautious; as mkts end flat

After marching hard for three day's on the trot, the markets settled into consolidation mode today and sustained buying interest in cement and auto space was offset by underperformance by banking and tech stock. The markets ended flat after three days of sharp rally. In terms of cues, there was not much to take from Asia and Europe. It was quiet for frontliners and also for the midcaps and smallcaps. The turnover was good but the breadth was almost neutral more in favour of declines.

 

Nifty closed at 4,359 up just 2 points, while Sensex shut shop at 14,880 up 73 points.

 

On today's trade Nilesh Shah, CIO, ICICI Prudential thinks that the positive onset of monsoon is one of the drivers. "Second is the India story being told and retold and retold to investors during the IPOs, during the conferences which has been conducted around the world by various brokerage houses. All these things put together is bringing in liquidity and economic numbers continued to be good, except for some softening in the auto sales and the two-wheeler sales. So the momentum is still positive and that's pushing the market at higher level," he said.

 

India's biggest real estate company, DLF debuts on the bourses on Thursday. The company had priced its IPO at Rs 525 per share. The price band for the IPO was Rs 500 to Rs 550. Analysts feel DLF is going to have a pronounced impact on the real estate stocks, because it's going to be the number one real estate company in terms of marketcap. For the last couple of days, there has been a renewed interest that we have been witnessing in all the realty stocks, which are already listed like Akruti Nirman, Unitech, Parsvnath. Taking indications from the grey market also, there are huge activities taking place as the premium in the grey market is also going up.

 

"Taking all this as an indication, tomorrow the demand or the appetite for the stock should be quite good. I am expecting that it could probably list at anywhere between Rs 560 to Rs 565. Thereafter probably, due to the good overseas appetite of the FIIs, the shares will probably run up from that level" adds SP Tulsian of sptulsian.com.

 

Ashu Madan, National Head, Religare is not too excited about that listing. "I don't see any move on either side. It's quite on predictable lines. Backed by that listing, all the momentum, which was to come on the realty stocks, is already more or less in place. So I don't see much movement left in realty stocks"
 

According to market experts, market testing new high is not a new phenomenon anymore as it has been happening in the last 3-4 years, so testing new highs should not deter any investment opportunities into the equities but the last 3-4 years rally has been largely confined by falling interest rate environment as well as the currency which has been helping the out sourcing business.

 

C Jayaram, Executive Director, Kotak Mahindra Bank, is cautious on the market in the near-term. On whether he sees any upside from these levels, he said, "In the near-term, I will be a little cautious because the market has run-up reasonable amounts in the last few days. You can't predict these momentum flows and what will be the peak. On a fundamental basis, one would be little cautious at these levels." he adds.

 

"Definitely the range is improving, from 4100 to 4300, it is 4200 to 4400. So immediate is that I feel it should cross 4400 barring some edgy moves tomorrow on account of the DLF listing. Otherwise, it seems that let's play with the momentum and as long as the momentum is there, there is no point in nursing the doubts and carry on" says Ashu Madan.