Is correction on cards?

After a few hiccups earlier this week, the Bombay Stock Exchange’s 30-share Sensex made its way past the psychological 15,000 mark on Friday. Despite negative cues from Asia and Europe, bulls romped ahead to end the week at all-time highs.

Friday, Bombay Stock Exchange’s Sensex closed at 14,964, up 102 points or 0.69% after making a new intra-day high of 15,007.22.

National Stock Exchange's Nifty ended at 4385, up 0.71% or 31 points, touching a fresh of 4411 earlier.

As India Inc gears up for the earnings season, which kicks off next week, how are markets poised from hereon?

“With the Sensex at 15000 and Nifty at 4400, we are treading the danger zone. Profit booking may emerge at these levels as people have been waiting for these psychological levels so that they make an exit,” said Hitesh Sheth, head-technical research, Prabhudas Lilladher.

Sheth warns that market is headed for a correction. “The Nifty may fall to 4250-4300 while the Sensex may see a 500-point dip to 14500 levels,” he said.

DD Sharma, senior vice president at AnandRathi Securities said, “the market has achieved what it wanted to. Considering a near-term horizon of around two months, the market is expected to consolidate. In fact, the upside is limited.”

Sharma expects select under priced stocks to outperform the indices. In his view, in the banking space, Oriental Bank of Commerce, Canara Bank and Punjab National Bank are likely to witness an upside.

Among the construction stocks, he finds Hindustan Constructions, Nagarjuna Constructions, and Gammon India attractive.

IT bellwether Infosys Technologies will kick off the earnings season Wednesday.

Friday, IT stocks moved up and the pullback in this sector is expected to continue ahead of the results.

“Technology stocks have underperformed the market in the last few months. They made no contribution to recent rally because of the rupee appreciation against dollar. Ahead of results, heavyweights in the space are likely to see an upside,” said DD Sharma.

However, an analyst from a local brokerage said, “the IT sector is likely to remain lacklustre until Infosys results are out. Market would be looking at the impact of rupee appreciation.”

He added that the IT companies are not likely to announce disappointing figures. “These companies have got good hedging strategies which can cap losses. If the rupee appreciation is compensated by higher volume growth, then the impact would not be much.”