Podcast | Stock picks of the day: Nifty likely to trade in 11,500-12,000 levels ahead of expiry

It was a historic week for markets as Nifty touched a new milestone of 12,000 and gained nearly 4 percent last week. Participants cheered the landslide victory of the National Democratic Alliance (NDA) in the 2019 Lok Sabha elections.

Buying was witnessed across the board and almost all the sectoral indices contributed to the rally. Meanwhile, traders ignored weak global cues and not so encouraging earnings announcements.

We expect volatility to remain high this week too due to scheduled derivatives expiry on Thursday. The week marks the beginning of the new month also and participants will react to a list of important macro data.

On the macro front, Core sector data and GDP data will be unveiled on May 31. Auto sales will also start pouring in from June 1. Apart from the local factors, US-China trade talks and movement of crude oil and currency will also be on their radar.

The Nifty may take a breather after the recent surge and consolidate in a broader range of 11,500-12,000. We feel the focus would return to quality midcap and smallcap counters, after a long spell of underperformance.

On the sectoral front, banking and auto look strong for the next week while metal and IT may continue to underperform. Traders should align their positions accordingly.