Market direction will depend on how Q2 results pan out

Auto, energy and realty have been the big gainers since September 1

The market has surged to new record highs through the past six weeks. The Nifty closed on Dussehra Eve at 18,338. It’s risen by 7.4 per cent since early September. In fundamental terms, this is dangerous territory.

Valuations are elevated-if Q2 results are disappointing, the market would correct. There are several global risks. Petroleum and gas prices are high, and expected to rise. This may lead to higher inflation and put pressure on the Trade Account, since India imports over 85 per cent of crude and over 50 per cent of gas. Coal prices are also elevated. Hence, domestic coal