Markets Seeing Consolidation, But Won't Face Major Correction: Analysts

The markets are seeing a "healthy consolidation", but will not witness a major crash, according to analysts.

The equity markets are presently experiencing a healthy consolidation despite the underperformance by the banking sector, according to Ajit Mishra, senior vice president of research at Religare Broking Ltd.

For the past two weeks, the markets are facing consolidation, but the bulls are defending the 21,500-mark decisively, he told NDTV Profit.

"Companies like Reliance Industries Ltd. have single-handedly helped to maintain the positive tone," he said. "On a sector-specific front, there is no shortage of opportunities."

The only challenge the markets are facing is the underperformance by the private banking and IT majors, Mishra said. The mixed trend within the large-cap private banks is something that is keeping the tussle on, according to him.

"For the banking sector to make any meaningful move, we should hold the 47,600 mark on a closing basis. That is when we can see a momentum shift from the sideways or negative to upwards," he said.

The S&P BSE Sensex and the NSE Nifty 50 will not see a major crash or correction, according to G Chokkalingam, founder of Equinomics Research Pvt. There are signs of political stability, India maintaining its lead in economic growth and other positive developments on the macroeconomic front, he said.

"The Bank Nifty witnessed an ongoing struggle between bulls and bears, leading to a volatile trading session," Kunal Shah, senior technical and derivative analyst at LKP Securities Ltd., said. "A significant hurdle for the index is identified at 48,000, marked by substantial call writing."

A decisive breakthrough above this level is expected to trigger a sharp short covering rally, he said. On the downside, the lower-end support remains intact at 46,900. A close below this support level may intensify selling pressure in the market, Shah said.

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