The barometer of Mr Markets greed and fear moved dramatically this week on the back of war rhetorics, which later receded quickly.
Nonetheless, traders and investors became jittery, and even the FPIs took a pause on their buying for the week.
However, the magic of SIP investing kept the inflow tap on for retail investors, who thereby kept on buying at lower levels.
SIP inflows for December were near their highs at Rs 8,400 crore.As the Union Budget is around the corner, smallcap and midcap stocks are expected to see hyper-activity on expectations of various measures.
On the other hand, largecaps have become too large for punts and, therefore, will majorly remain sideways.As usual, the agriculture and housing sectors will see action as the Budget could provide some relief to these stressed sectors.While the broader market indices are picking up pace, largecaps such as Bharti Airtel are having a good run on the strength of the successful fund raise earlier this week.
It received an encouraging response of 3 times, which surely speaks about the huge potential in the telecom space in India and the long-term visibility for the company.
Investors having huge appetite and capital can invest in telecom sector with a decadal time horizon.Event of the weekThe government once again removed the bottleneck in the coal mining industry by allowing private companies to participate in coal auctions without stifling end-user conditions.
This will significantly boost investment in coal mining in India, currently the fourth largest in coal reserves and fifth largest in coal production.
Ancillary industries like mining equipment, explosives end user power industry will get a big boost from these initiatives.
Such reforms, when come in large dose, have the potential to kickstart the economic engine.Technical OutlookThe Nifty50 is expected to move in the 300-400 range between 12,000 and 12,400 levels at least till Budget.
The market in general is not overbought and, therefore, has the potential to move higher.
Wider participation in stocks across the board is expected to bring in a feel-good factor in the market.Volatility is expected to increase and can lead to whipsaw losses for traders.
Hence, buying on dips will be a good strategy for traders before the Union Budget with weekly lows as stop losses.Expectation for the weekMarkets are heading for testing times given as the earnings season has set in and Budget parlays have to be digested in the weeks ahead.
Volatility is expected to increase, although prices are not expected to move much till Budget.
However, sector-specific rallies are likely to continue.
Fertilisers, housing, infrastructure and cement sectors are likely to show large outperformance.
In general, the market is heading higher and, therefore, investors should accumulate quality stocks through bottom-up approach with higher focus on midcaps stocks.Nifty closed the week 0.2 per cent higher at 12,256.