Markets recouped some of the recent losses and closed on a positive note during the week ended due to short covering, expectations over tax sops in the coming budget and positive global cues.
The Sensex and the Nifty surged by 585 points and 200 points at 26,626 and 8,186 respectively. It is pertinent to observe that FIIs net sold Rs 31,128.61-crore worth equities in October-December quarter, especially after demonetisation, US elections and US Federal Reserve’s hawkish commentary.
In 2016, FIIs bought only Rs 18,195.73 crore worth of shares while DIIs purchased Rs 35,362.56 crore worth stocks. Benchmark indices were out performed by the midcap and smallcap indices in 2016.
For 2017, the general consensus is to buckle up and expect another wild ride. Experts predict that since demonetization is now history, the Union Budget and the implementation of GST will dictate market future in the coming year. Early part of the coming week will reflect reaction to weekend speech of Prime Minister.
Sops announced by the Prime Minister may give a fillip to the housing sector. Near term direction of markets will be governed by Q3 results season, global crude oil trends, movement of rupee against dollar and global cues.
For the week ahead, chartists predict a trading range of 26,100 and 27,150 and 8,000 and 8,375 for the benchmark indices. Support for the indices evident at 26,325 and 26,050 for the Sensex and 8,085 and 8,000 for the Nifty.
