'Markets in consolidation mode; buy on dips, sell on rallies': Kranti Bathini on current market scenario

Indian equity markets remain stuck in a consolidation phase, with the Nifty struggling to decisively cross the 26,000 mark amid weak global cues and sustained foreign investor selling, said Kranti Bathini, Director – Equity Strategy, WealthMills Securities, in an interaction with ET Markets.Bathini said markets are witnessing a time-wise correction, with sharper pain in the midcap and smallcap segments, where several stocks have corrected 25–30%. “The Nifty is broadly oscillating in a 200–300 point range. This is not a runaway market. It’s a classic consolidation phase,” he said.Why markets fell this week and bounced back todayBathini noted that the Nifty briefly slipped below 26,000 mid-week but found strong support around 25,850, triggering a rebound. However, global cues remained unsupportive for most of the week.Friday’s bounce, he said, was driven by positive Asian markets and improved global sentiment, though the index still failed to reclaim the 26,000 mark decisively.FII selling continues, but markets show resilienceForeign Portfolio Investors (FPIs) continue to remain net sellers, particularly towards the year-end.“November and December typically see FPI profit-booking. At the fag end of the calendar year, they tend to close positions,” Bathini said.He pointed out that FPIs sold nearly ₹3 lakh crore last financial year and about ₹2.95 lakh crore so far this year, yet markets have avoided any major correction.“This reflects the maturity of Indian markets. Domestic institutional investors and retail participation have emerged as strong liquidity providers,” he added.US CPI data: short-term relief, long-term clarity awaitedOn the softer-than-expected US CPI print of 2.7%, Bathini said markets drew some optimism, but clarity on the Federal Reserve’s rate trajectory will emerge only over the next few policy meetings.He also flagged concerns around US tariff risks, prolonged shutdown effects, and their impact on consumption and inflation trends.“The data provided temporary relief, but markets need confirmation through upcoming economic numbers,” he said.'Rupee depreciation a key worry'One of the biggest overhangs for FPIs remains the sharp depreciation of the rupee, which recently touched 91 against the dollar.“Currency weakness and uncertainty around global trade deals continue to keep foreign investors cautious,” Bathini noted.Key data points to track in DecemberWith global markets heading into a holiday season, Bathini said FPI flows and currency movement will be the most critical variables to watch in the coming weeks.On the domestic front, he highlighted recent policy reforms, including:Insurance sector reformsPassage of the nuclear power bill, opening long-term opportunities in the energy space “India’s power demand will rise sharply with data centres, semiconductors and digital infrastructure. Nuclear power is an emerging long-term theme,” he said.Sectors to watchBathini identified the following sectors as potential opportunities:Infrastructure – attractive valuations ahead of higher capex in FY26–27Defence – after a healthy correction and consolidationNuclear energy – an emerging, under-penetrated themeSemiconductors and data centresBanking & financial services – still the core drivers of Indian marketsMarket outlook & key levelsFor the near term, Bathini expects markets to remain range-bound.Resistance: 26,000–26,250 on NiftySupport: Around 25,850“A decisive breakout above 26,250 is needed for fresh upside. Until then, it’s a buy-on-dips, sell-on-rallies market,” he said.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts/brokerages do not represent the views of Economic Times.)