Benchmark indices may open on a sluggish note with trading volumes likely be to thin because of the holiday mood. Asian markets are closed for the New Year, and US and key European markets ended on a bearish note Thursday. This could weigh on sentiment back home despite the strong closing yesterday.
In addition, the SGX Nifty is down 28 points at 7920 this morning, indicating reluctance of buyers to chase prices.
Traders say the focus will be on technical levels in the near term as there are no big fundamental triggers to look out for.
The Nifty closed a shade below 7950 on Thursday, and technical analysts see resistance for the index in the 7950-8000 zone. The Sensex too is looking strong on the charts, having closed above 26000.
Core sector data for November released post market hours Thursday continues to underscore the patchy nature of the economic recovery.
Cement, steel, crude oil and natural gas production declined month-on-month, and electricity production was unchanged. Fertilizer, refined petroleum products and coal output increased, but barring refined products, the pace of growth was slower.
With third corporate earnings too expected to be broadly subdued, big upsides looks difficult near term, brokers say.
In key stocks to watch out today, broking firm CLSA has downgraded its rating on pharma firm Cadila Healthcare to underperform and slashed price target to Rs 355 from Rs 473 earlier. This stock had crashed to a 52-week low yesterday following the US FDA’s warning letter to two Gujarat units of the company.