For a sustained up move from the present levels, we would need to see a pick-up in industrial and consumer demand, and growth in corporate earnings
In CY18, the midcap and smallcap indices had tanked 13 per cent and 24 per cent
Receding global trade war fears, continuity of government policies, benefits of low-tax for corporates, good monsoon, and low-interest rate regime will turn sentiment around in 2020
Here's how key indices look on the technical charts.
Despite the optimism surrounding the likely pick-up in the global economy, most economists remain cautious on the road ahead for India after the recent GDP print of 4.5 per cent for Q2FY20
Morgan Stanley has raised their stance on EM equities to equal-weight from underweight and maintains an overweight stance on Japan in a global equities context
A rise in the Nifty has been used for squaring longs and shorting stocks. The medium-term support of 11,550 - 11,500 should act as a range for a bounce
One should be stock specific and follow the trend with trail stop loss levels till it reverses
Eventually, midcap and small-cap indices are likely to touch all-time-high during this calendar year
Going forward, equities are likely to maintain their upward trajectory and touch new highs
Besides global cues, investors will look closely at macro-economic data points such as the second quarter GDP numbers and the output of eight core industries
What is the reason for divergent performance of large and mid-cap indices?
For now, liquidity still appears fine and there is no undue cause of concern and visible trends being seen as a shift from equity linked assets to other asset classes.
Even as most investors expect stocks to rally this year on the back of stronger earnings growth, UBS says results will disappoint the consensus estimate of 22% growth for FY19
Retail investors would do well to stick to their asset allocation plans, review their small and mid-cap holdings closely and bring down their return expectations for the next few quarters.
Rupee's value against dollar, crude oil prices, direction of foreign funds will also impact investors' risk-taking appetite
The wider NSE slipped by 41.95 points or 0.47 per cent to 8,897.55 points
Market participants would also eye GDP data, which is scheduled to come on Tuesday