Benchmark indices, the Sensex and the Nifty closed 166 points and 40 points higher at 26316 and 8114 during the week ended.
Bargain hunting at lower levels improved market breadth in midcap and smallcap stocks. Both the Midcap and Smallcap indices outperformed the frontline indices. Lending support to the market against FIIs selling were domestic institutions.
In a significant relief for stock markets, brokers, banks, and mutual funds, the government has excluded securities from the definition of ‘goods’ in the revised draft Model GST Law.
It is also important to politically settle the issue of turf between the central and state officials over administering assessees under GST. With Parliament proceedings stalled and disrupted last week over demonetisation, it remains to be seen how the government will woo the Opposition for passage of important bills.
In the near term direction of markets will be dictated by developments pursuant to demonetisation, concerns over punitive measures like penalty taxation, macro economic data like impact of demonetisation on GDP and global cues.
For the week ahead, chartists predict trading range of 25700-27000 and 7900-8350 for the benchmark indices. Support for the indices evident at 26000 & 25700 and 8010 & 7915. The market is most dangerous when it looks best; it is most inviting when it looks worst. Buy good standard stocks that have stood the test of time during the present corrective phase.
