Nifty to remain in 5,050-6,100 range: Barclays

The National Stock Exchange benchmark index Nifty is likely to remain between 5,050 and 6,100 in the next 12 months, because of lack of triggers in the domestic macro-economic environment and uncertainty in the global markets, a report says.

"Barring a global shock, we expect Nifty to remain in the range of 5,050-6,100 with enough volatility to allow nimble investors to make returns," the report noted.

The 50-share index is currently hovering at 5,300 level. In the foreseeable future Indian stock market is likely to resemble a game of "snakes and ladders" for investors as growth, inflation and politics continue to flash red, while, valuations, earnings momentum and some policy measures have now turned favourable.

"Indian portfolio strategists need to be nimble in playing what we think could be a prolonged 'snakes and ladders' game, between lower growth, high inflation, uncertain politics vs modest expectations, reasonable valuations and the possibility of some, even if partial, policy measures," the research report noted.

After a phase of 8.9 per cent annualised GDP growth between fiscal year 2005 and financial year 2010, India's GDP is expected to grow around 6-6.5 per cent in 2012-13.

According

to Barclays Capital, sectors like healthcare, IT services and consumer staples due to earnings visibility and currency benefits; and building materials and telecoms as they could benefit from a shift in government policies.

Meanwhile, sectors like financial services, which could be impacted by a worsening credit environment and slower growth, and on utilities due to operational risk, Barclays said.

Global events, particularly those in the Eurozone, may continue to have an impact on flows to India.

Besides, the increased global uncertainty due to Europe and low global growth could make portfolio flows to India hostage to the global risk environment. It would also result in lower volumes and higher volatility.

"The increased global uncertainty due to Europe and low global growth could make portfolio flows to India hostage to the global risk environment. It would also result in lower volumes and higher volatility," the report said.