Investors also resorted to book profit ahead of December quarter (Q3FY24) results as markets enter an overbought-zone
The market saw some wild swings in the afternoon trade on January 5 as the Sensex and the Nifty went off the day’s high with investors booking profit only to make a comeback towards the end of trading session.
At close, the Sensex gained 0.2 percent to 72,026, while the Nifty was up 0.2 percent at 21,710.
Equinomics Research founder Chokkalingam G, expects the market to fall another 1-2 percent, saying it will make the overall breadth healthy. "We can watch out 21,000 as a key level for Nifty going ahead," he said.
Amit Goel, Co-Founder & Chief Global Strategist Pace 360, warned of 10-15 percent correction in the Nifty in the current quarter, saying the benchmark index was “not just over-valued but is in bubble territory”.
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The European markets were trading lower as investors grew anxious over US jobs report due later in the day. The report will be tracked for its potential impact on the US Federal Reserve's rate cut timeline.
A hotter-than-expected employment report could reduce bets on early rate cut as officials believe that strength in the job market contributes to rise in inflation, both in number of jobs created and wage growth.
Investors also resorted to booking profit ahead of December quarter results as markets entered an overbought zone. Broader indices, the Nifty midcap 100 and the Nifty smallcap 100 gained up to 0.6 percent amid high retail exuberance.
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"The smallcap index is likely to fall another 10 percent in the near-term to make overall markets healthy," said Chokkalingam G.
VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, agreed, saying the valuation in broader markets couldn’t be sustained for long and a correction was likely.
Technology stocks were the star performer in the choppy trade. The Nifty IT gained a percent led by TCS, Infosys, and HCL Tech. Joining the list of sectoral leaders were auto and realty.
Banking and financial services, metals, and pharma stocks were the top laggards.
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Sensex, Nifty end with modest gains, but may fall 1-2% from here; watch this key level - Moneycontrol
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