The markets ended marginally higher after a volatile session with the Sensex and Nifty closing in green with gains of 0.1 per cent at 40,487 and 11,938.
Sectorally it was a mixed bag with auto leading the pack with gains of 0.8 per cent, followed by metals, oil and gas and energy.
On the other hand, realty was the biggest loser followed by media, IT and FMCG. The market was range-bound as it turned cautious ahead of important events this week both domestically and globally. Further with US reporting strong jobs data and China reporting weak exports, investors are worried again over US-China trade deal.
According to analysts, the market is likely to remain range-bound in near term as current Nifty valuation captures the sharp earnings recovery expected in FY21 and leaves limited room for upside. Going forward, market would be driven by CPI, IIP and WPI numbers scheduled for release this week. On the global front, US Fed and ECB meeting, along with Brexit and trade deal developments would drive the markets.
The momentum indicators are also suggesting some corrective action. Thus traders should look to remain short at the current levels for the corrective move. Overall trend is still bullish, analysts said.
“Nifty has closed in the positive territory in the last trading session; however, the momentum is still weak on the daily as well as weekly charts. The Index has formed lower tops and lower bottom; hence till this structure isn’t violated the overall chart set-up is negative. So, the trading strategy is to remain on sell side for the target of 11800 with a stop loss pegged above 12000 on a closing basis,” Jay Thak-kar, CMT, head technical and derivatives research, AVP Equity Research, Anand Rathi Shares and Stock Brokers.
“Market was range bound as investors are closely watching the economic macros like CPI inflation and IIP data for any signs of progress in the government’s effort to revive the economy. FIIs are likely to turn risk averse in domestic market as strong US job data, progress in trade talks and the expectation of status quo policy from US Fed will add impetus to global market, said Vinod Nair, the head of research at Geojit Financial Services.
Going forward, market participants would keep a close watch on CPI, IIP and WPI numbers scheduled to release this week. On the global front, trade deal developments between US-China would be a key determinant in deciding the direction for Indian as well as global markets.