Stocks in Mumbai look to bounce back after a late sell off on Friday dragged down the Sensex by more than one percent. Positive global cues might provide temporary relief atleast in the first hour of trade. Expect the benchmark index or the Sensex to gain nearly 0.5 percent for the day
The majority of selling came in the Realty sectors with the sectoral index losing more than 2 percent for the day. DLF and Unitech were major losers among the big names.DLF is likely see some more pressure around Rs 360 level as there are lot of unanswered questions regarding the merger valuation. Stay away from this space for now, as we are of the opinion that this sector might crash, if there is any sort of correction in the near term.
Smallcap and Micap stocks were less affected in Friday's fall as they remained resilient with 0.4 and 0.5 percent fall relative to more than one percent fall in the Sensex.The Auto pack remained strong even in a falling market as witnessed by strong performance from Tata Motors and Hero Honda. We are not bullish on this sector as we believe that the valuations in the auto sector are stretched and investors should avoid taking long positions in these counters.
Overall, a flat to positive open is on the cards for the stock market indices.There is continuous supply at higher levels and we might see selling coming in at higher levels. Bulls might try to finish off the day, with the Nifty closing above 5,000 mark.