Nifty, Sensex To See Weakness In Short Term, Say Analysts

With a lot of steam left in the long run, equity markets will remain volatile in the short term, with weakness in benchmark and banking indices, according to market analysts.

There is some weakness coming in Nifty and Bank Nifty in the near term, according to Hemen Kapadia, senior vice president of institutional equity at KR Choksey Stocks and Securities Pvt. "Avoid trading and in a market like this, shorting has not worked."

Volatility is not going away and if it gets slightly deeper, one can look to buy dips, Kapadia said.

A sell-off in the last hour of Monday's trade made the equity benchmarks give up their gains and close lower.

The NSE Nifty 50 fell 0.38%, or 82.10 points, to end at 21,771.70, while the S&P BSE Sensex closed 0.49%, or 354.21 points, lower at 71,731.42.

A few sessions of weakness do not warrant a downward trend, according to Gautam Duggad, head of research and director of institutional equities at Motilal Oswal Financial Services Ltd.

Nifty has grown over 20% last year, with mid- and small-caps posting a stellar rally, he said. Companies have posted strong earnings, the budget was excellent, and India is very stable on macro and micro numbers, Duggad said. "We are in the best of times... So, I would not mind if the markets were to consolidate for a little bit."

Kapadia has a 'buy' rating on Adani Enterprises Ltd. and Tata Steel Ltd. He suggests buying Adani Enterprises with a target of Rs 3,400 and a stop-loss of Rs 3,100. Tata Steel Ltd. can be bought with a target of Rs 152 and a stop-loss of Rs 137.5 apiece, he said.

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