Buoyed by excessive liquidity, US Fed keeping interest rates unchanged, steady progress of monsoon, positive global cues and expectations of rate cut in the coming RBI meeting; markets extended ‘record’ breaking gains during the week ended.
Benchmark indices, the Sensex and the Nifty ended 281 points and 99 points higher to close at 32,310 and 10,015 respectively.
Observation of Nifty’s journey to the 10K mark reveals that Nifty took 9 years to reach 2,000 mark in December 2004; 3 years thereon to reach the 6,000 mark in December 2007; and then because of 2,008 crisis it took 6 and half years to climb the next 1,000 points; reached 9,000 in March 2017 and thereafter in just 4 months it touched the 10K mark on July 25, 2017.
It is pertinent to observe that Nifty 50 has given a return of 9.1 times in just 21 years since its launch date, April 22, 1996.
Continued buying from DIIs and FIIs at higher levels kept the sentiment exuberant. On the back of “irrational exuberance”, markets are ignoring negatives like geopolitical tensions of both domestic and international and poor IIP growth.
The market keeps rewriting the records despite the unenthusiastic performance of economy. In some ways, the party is a bit confusing and the rally essentially a massive bet on the reform agenda will come to a nasty end if the macro picture is not encouraging.
Over 300 companies will be announcing their results, which will have a bearing on the movement.
For the week ahead, chartists predict trading range of 32,750-32,850 and 9,825-10,200 for the indices. Support for the indices evident at 32,050 & 31,800 and 9,915 & 9,825.
