Mumbai: The market is likely to remain volatile as rising geopolitical tensions and concerns over global economic growth weigh on investor sentiments.
The market is closely watching the progress of the monsoon and the trend in crude oil prices.
According to experts, time-wise correction will continue for the market and once again the '20 DMA' (double exponential moving average) will act a support for the Nifty. The index has not been able to sustain above 12,000 levels and for the entire week, it traded in the range between 12,000 levels on the higher side and 11,800 levels at the lower side.
According to experts upside looks limited for Nifty and it may find difficult to close over 12,000.
"On the other hand, downside movement will be swift, and the Nifty can soon touch 11,720 levels and close below that may take it to 11,600 levels... Negative news flow from the finance sector on loan repayment is dampening the investor's sentiments which can be a trigger for a bigger correction before the budget session,” said Romesh Tiwari, Head of Research, CapitalAim.
Amongst the sectorial front, stocks from the 'Metal' space have witnessed buying momentum in the last couple of sessions and hence certain stock from this space could see outperformance in near term. Also, the Mid-Caps are expected to come back in momentum when the broader market resumes the uptrend post this consolidation.
Besides fears over an escalation of trade war, the movement of the rupee against the dollar and the direction of foreign fund flows will also set the course for the key indices.
The rupee weakened 33 paise to 69.81 against the dollar from its previous close of 69.48.
"Technically, the Nifty remains in an intermediate uptrend and traders will need to watch if the index can now hold above the immediate supports of 11,769-11,680 for the uptrend to sustain in the coming week," said Deepak Jasani, Retail Research Head, HDFC Securities.
The market is worried about the fiscal deficit as well. Vinod Nair, Head of Research, Geojit Financial Services, says, "(in the Budegt) the government will have to follow the fiscal prudence given the shortfall in financial revenue. It will be a challenge to match this expectation but government may have to stretch the fiscal target in the short-term.”