Stock Markets : The Road Ahead

The stock markets continue their upward bias though last week saw the indexes showing volatile movement. The index looked struggling and tired after a huge run and is taking a breather to march again with enthusiasm. The sensex closed at 7780 and nifty closed at 2383 levels.
Outlook on markets still positive
The markets are expected to remain volatile with upward bias with short term perspective. The long term movement also looks positive. However , small bouts of corrections are not ruled out.
The biggest factor for markets to remain buoyant is that there is enough liquidity in the markets. The FII's continue their buying spree acrosss the caps and sectors. The Indian stock markets are seeing an unprecedentedt trend with large money flows chasing stocks and trying to find out value among underperforming stocks.

Retail investors have also flocked in large numbers to try their luck and get some pie in the stocks. The number of Demat accounts opened in last month has crossed the 2 Lakh marks. Retail investors are still betting on the IPO's as the main entry gate to the stock markets . With slew of IPO's lined up to hit the markets and retail interests intact, the IPO's are poised to do well and bring wealth to the investors.
Which sector will perform well from here ?
The Banking space is expected to perform better with private banks taking a lead over their public counterparts. Technology sector has remained an underperformer with no fresh triggers , however , positive news on the bell weather stocks and acquisition plays may create interest in the sector. This sector is expected to be a performer. Metals remain sluggish and are expected to be same with short term perspective. Oil & Gas sectors are expected to be market performer. Textiles will also continue to attract buyers.
Investment Strategy
It is recommended to keep the IPO investment route intact. Fresh buying in the stock markets should be done only on selective basis and not on rumours. Stick to the fundamentals and growth stories. Beware of small cap stocks which have run up quite high and do not let greed overtake the senses.