Laurence Balanco of CLSA, on Tuesday, said that Nifty will see consolidation between 17,400 and 18,500. He believes that the Indian equity market is likely to see a time-based correction over the next 2-3 months. Balanco also mentioned that for any investor looking for a new entry point, banks are the best bet in the current market scenario. He also mentioned that pharma is expected to remain rangebound.

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In an interview with CNBC-TV18, he said, “We think, into year-end, there is a potential that we now need to continue this consolidation pattern, basically between 17,400 and around 18,500; we digest those gains with a bit of sector rotation for the longer-term trend to resume.”

According to him, the Indian equity market is likely to see a time-based correction over the next 2-3 months. “All the evidence currently suggests that we have got a time-based correction of another 2-3 months of this sideways ranging price action. So the fact that we see more time-based and ranging action, suggests that at the sector level, you need to be a bit more active rotating across other themes,” Balanco said.

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On sectors, he said, “The Nifty Bank Index, is at an attractive entry point to add Indian banks. On the other side of that, IT like the broader Nifty has now gone into a stalling pattern, and more of a trading range; we think this is an opportunity to reduce and take some profits, because we don't see a sustained breakout and continuation of the longer-term uptrend.”

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“One of the weaker sectors has been pharmaceuticals, which peaked much earlier than any other sector, and again is rangebound. So if you are looking at a new entry point, it's definitely the banks because of the short-term correction and on the other side of that is the rebound in IT and possibly consumer goods,” said Balanco.

For the entire interview, watch the video

(Edited by : Dipikka Ghosh)

First Published:Nov 16, 2021 9:48 AM IST