Expect volatility to rise in banks

By Anand James

A 10-week range has been broken in the Nifty, helped by a vertical rise in state-owned banks following the government's recap bonanza. The enthusiasm in banks was not shared by stocks in other sectors as investors continued to mix and match valuation concerns with earnings positivity.

Expect volatility in banks, with re-rating possible as competition between private and public sector banks tightens. A chunk of central bank meetings assures some rough weather ahead but major surprises before FOMC's December meeting are less likely.Firm roll over numbers, meanwhile presents a fair indication towards continuation of ongoing uptrend, aiming 10,430 initially, and then 10,670.

Stay long with an eye on 10,250 in Nifty, below which downside risk starts. Expect small and midcaps to be active in anticipation of GST updates. Pharma and FMCG space also offers entry opportunities, while the deluge of IPOs could take some muscle off the secondary market.

(The writer is Chief Market Strategist at Geojit Financial Services)