Liquidity may see market momentum continuing next week

Commentary

oi-Sunil

By Sunil Fernandes

Published: Saturday, October 6, 2012, 10:05 [IST]

A gush of liquidity largely from foreign funds is expected to push the Nifty higher next week. However, every sharp rally is likely to see profit booking at higher levels which will most likely restrict gains.

Investors would now start betting on beaten down sectors from the infrastructure and the real estate sector. In fact, stocks from the real estate sector have sprung into life in the last few trading sessions with the likes of HDIL, Brigade Enterprises and small cap real estate stocks like Kolte Patil and Orbit Corporation witnessing buying interest.

Another high beta name which is attracting volumes and speculators is the PSU banking pack. These set of stocks are likely to remain highly volatile, especially in view of the RBI Monetary Policy meet slated later for October 31. Analysts are not expecting the RBI to cut rates in the meeting, though, it must be admitted that lot would depend on the inflation data on October 15.

Markets are also expected to look to the result season that kicks-off next week with Infosys declaring its results on Friday.Analysts would closely hear what the Infosys management has to say with regards to client spends and other challenges.

The rupee has already hit a fresh high recently which should have an impact on the rupee earnings of software companies going forward.

Meanwhile, global cues are also expected to play a significant role next week with the earnings season kicking-off in the US with the results of ALCOA.

Uncertainty in Europe and unfavourable news from Greece and Spain is likely to stall any runaway returns from the markets.

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