Consolidation on the cards? Nifty may find it tough to cross 18,800 mark, says Laurence Balanco of CLSA

Balanco sees some signs of fatigue and highlighted the build-up in selling pressure.

“Nifty may battle to get through 18,800 mark; likely to see consolidation,” CNBC-TV18 quoted Balanco saying so.

On the other hand, he believes there is much steam left in the midcap space and the midcap index may jump another 13 per cent from the current levels as the absolute price-action in the Midcap index confirms a breakout. In the midcap space, he expects auto stocks to outperform their large-cap peers, as per CNBC-TV18.

Apart from midcaps, Balanco underscored crucial breakouts in realty stocks also. Nifty Realty index is up over 15 per cent for the calendar year 2023 so far against a 2.5 per cent gain in the benchmark Nifty50. Nifty Midcap 100 index is up over 8 per cent this year so far while the Nifty Smallcap 100 index is up over 7 per cent in the same period.

Domestic equity benchmarks the Sensex and the Nifty have been eyeing their fresh all-time highs for the past couple of weeks but they have seen profit-taking at higher levels amid weak global cues.

Analysts expect a correction in the short term but not a knee-jerk reaction in the domestic equity markets due to India’s healthy economic growth outlook and the signs of the end of the rate cycle in the country. The market outlook is healthy for the long term.

“We have already noted other factors like robust growth of capex, NRI remittances inflows, service exports, investments through PLI schemes, banking credit growth and asset quality of banks’ lending would help the domestic markets. Reversal of the rate cycle would help in robust inflows from the FIIs in the medium to long term. Domestic retail investors also continue to pour into the markets at the rate of over five lakh new investors every week,” said G. Chokkalingam, Founder of Equinomics Research.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.

Updated: 12 Jun 2023, 10:55 AM IST