This week what came to the fore once again was the bipolar nature of the market. Software and pharma stocks continued to rally, while banking stocks fell. Investors also continued to take shelter in FMCG stocks and ITC rallied on Friday.
It's possible that banking stocks will continue to drift lower in trade. On Friday banking stocks fell sharply after IndusInd Bank reported a rise in non performing assets. This dragged banking stocks, particularly PSU banking stocks sharply lower. However, a few PSU banking stocks may be worth buying considering that they have declared interim dividends recently, to boost the government coffers. This would ensure that investors receive some dividend.
Meanwhile, all attention is likely to shift to technology stocks next week after Infosys declared a splendid set of results. However, investors will now await the results of Tata Consultancy Services due next week. Other important earnings lined-up for next week include those from Yes Bank, Axis Bank and HCL Tech.
For the banking stocks investors would closely look at non performing assets to see if they have deteriorated further, particularly for PSU banks.
On Monday it would be interesting to see how the markets react to the poor factory output data. For more on the same read here.
Also, the US jobs number was dismally low, raising hopes that the Fed would reduce its QE3 programme much slower then anticipated. Read more on QE3 here
It's going to be a volatile trading week for sure and traders are advised caution.