Consolidating Budget week gains and spurred by policy moves in realty and mining sectors markets notched gains for second consecutive week. Benchmark indices the Sensex and the Nifty closed 72 points and 25 points higher at 24,718 and 7,510 points respectively. Renewed FII buying of nearly $1.4 billion has kept sentiment positive. FM’s pledge to further cut the fiscal deficit has stoked speculation of rate cut by RBI.
Efforts to streamline policies by amending mining laws and announcing Hydrocarbon Exploration Licensing Policy (HELP); clearance of Real Estate and Aadhaar Bills have reaffirmed the Centre’s commitment to reforms.
Apart from domestic macroeconomic data, three global cues will continue to spark market volatility for better part of coming months: China’s currency devaluation, volatile crude oil prices and uncertainty over the Federal Reserve’s rate hike plans.
Fears over China triggering a currency war are easing and the race to devalue currencies by developing countries seems to be on hold for now. Crude oil prices have rallied since mid February too. Fed officials have lately acknowledged that the markets might be too shaky for rate hikes now. Track WPI and CPI data for further action on interest rate front.
For the week ahead chartists predict trading range of 24,150-25,300 and 7,300-7,675 for the indices. Key supports for the indices are at 24,400 and 24,100 and 7,415 and 7,320. Have realistic expectations. When expectations are too high, it results in overtrading underfinanced positions, and very high levels of greed and fear —making objective decision–making impossible.
