An important feature of the rally that took the Sensex to record high was its weak structure and lack of enthusiastic investor participation. The market lacks momentum to take it convincingly to new highs. There is no support from the mother market US, either. The S&P rally of 13.6% YTD was led by just 10 tech stocks. Such concentrated rallies are unlikely to last long. In India, even though the rally is more broad based, there is no valuation support to take the market much higher. So investors should wait and watch for clearer direction from the market.
Early next month expectations regarding Q1FY24 results will influence the market. Investors may wait for cues from the results to know which sectors will outperform for the rest of the year.
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