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Below is the Weekly Market Outlook By Mr. Ajit Mishra, VP - Research, Religare Broking Ltd

It turned out to be a volatile week for equity markets, tracking mixed earnings and muted global cues. After the subdued start, a sharp cut in the middle derailed the momentum however resilience in the select heavyweights in the final sessions trimmed losses. Eventually, both the benchmark indices, Nifty and Sensex, lost over a percent each to close at 21,571.80 and 71,423.65 levels respectively. On the sectoral front, banking, realty and financials were badly hit while energy and IT managed to end in the green. Interestingly, the broader indices outperformed for yet another week however deterioration in the market breadth showed selective participation.

The coming week is a holiday-shortened one and we expect volatility to remain high, due to the prevailing earnings season and the scheduled monthly expiry of January month derivatives contracts. On the global front, indications are mixed however strength in the US markets would continue to offer support. With the end of a month-long consolidation phase, we are eyeing 39,000 in the Dow Jones Industrial Average (DJIA) and the support has shifted to the 37,300-37,700 zone.

We expect Nifty to remain range bound with bias on the negative side until we see improvement in the banking pack. On the higher side, 21,850-22,000 would be tough to cross while the 21,000-21,200 zone will act as a cushion, in case the decline resumes. Meanwhile, participants should maintain stock-specific approach and focus on sectors other than banking for long trades. Traders can choose selectively from the midcap & smallcap space too and be cautious in stocks that are witnessing excessive momentum.

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