Despite sharp correction on the last trading day, markets notched gains for second successive week on the back of good PMI numbers, low expectations of US Fed rate hike and continued buying from FIIs.
The Sensex and the Nifty closed higher by 265 points and 57 points at 28,797 and 8,867 points. A renewed buying interest was seen in select midcap and smallcap stocks. High valuation concerns, disappointment from ECB and North Korea nuclear test have dampened sentiment. With the President’s assent to the GST Bill, GST Council meeting may hint at the possible GST rate and also address the issues pending between Centre and States.
Near-term market movement will be dictated by inflation data, IIP numbers, global cues, the movement of rupee against the dollar and crude oil price movement.
After remaining stable for better part of summer, weekend sell-off in US markets triggered fears of sharp correction in near term. Days of near zero rates may now be coming to an end. Not the time for complacency, track global cues carefully.
For the week ahead, chartists predict trading range of 28,150-29,500 and 8,675-9,075 for the indices. Key supports for the indices are at 28,600 and 28,275 and 8,775 and 8,675.
Accumulate stocks with strong fundamentals that are selling at a bargain price. It's important to distinguish the difference between a value company and a company that simply has a declining price.
