Domestic markets witnessed a lacklustre trading week, wherein the benchmark indices remained sideways with no clarity in the trend.

As elevated valuations cap the upside in the broader market, smallcap rally was subdued but steady with 52 stocks gaining in double digits during the week. Mid and smallcaps had witnessed strong rallies over the past few months thus making valuations a little stretched.

Automotive Stampings was the top gainer in the smallcap pack with a 44% return, followed by Visaka Industries (34%), Jayaswal Neco Industries (27%), and Schneider Electric (27%).

About 11 stocks, including Triveni Turbine,Sanghvi Movers, Indiabulls Real Estate, Parag Milk Foods, Everest Kanto, SH Kellar have offered returns between 20-25% during the week.

In the midcap segment, 13 stocks including Vodafone Idea, YES Bank, Indian Overseas Bank have risen in double digits. While VI gained 10.5%, YES Bank and Indian Overseas Bank were up over 32% and 21%, respectively.

From the Sensex pack, SBI topped the charts with 11.3% return, followed by Sun Pharma at 8.3% and TCS at 4.2%.For Nifty, the favourable global scenario initially boosted the benchmark to inch higher but lacked confidence near the psychological mark of 22,000 and enticed profit booking. Buying was seen in largecaps where there is still some comfort, compared to the broader market.

What should investors do?

Going forward, analysts said caution prevails in the market ahead of the release of US, UK, and Indian inflation data next week, while the US 10-year yield is inching higher.

Post the hawkish commentary from the US Fed and RBI and their focus on bringing inflation under control, next week’s inflation data would be important data to watch out for.

“We expect the market to turn cautious and consolidate in the near term amid key macro data to be announced and the last leg of Q3 results,” said Siddhartha Khemka, head of retail research at Motilal Oswal.

“While our market awaits some potent triggers to come out of the slumber phase, we would advocate traders to keenly focus on global developments as they might act as a catalyst to set up near-term trends while focusing on stock-specific action for an outperformance,” said senior analyst of technical & derivative research, Angel One.

Technically, the short-term trend of Nifty remains intact and there is a possibility of further upside towards 22,000 levels in the near term.

Any dips down to 21,600-21,500 levels could be a buying opportunity, said Nagaraj Shetti of HDFC Securities.

(With data inputs from Ritesh Presswala)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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