Expectedly positive announcements by the Union finance minister, Mr Pranab Mukherjee, on the UPA government’s borrowing plans, disinvestment roadmap, financial sector reforms, better-than-expected first quarter results, encouraging progress in monsoon and positive global cues helped Indian markets record their biggest weekly gain after the “big bang” rally at the time of the Lok Sabha election results during the week ended.
On the BSE, the Sensex surged 9.5 per cent to close at 14,745 and the Nifty on the NSE gained 9.3 per cent to end at 4,375. Market breadth was extremely good reflecting a change in investor sentiment and the return of risk appetite among the market players.
For the week ahead, chart-ists predict a trading range of 14,240 and 15,600 for the Sensex and 4,140 and 4,600 for the Nifty. Immediate res- istance to the indices is at 15,000 and 15,360 and 4,480 and 4,600. Supports for the week are at 14,360 and 14,000 and 4,260 and 4,080.
The sentiment has gained momentum following positive economic and earnings news. The disinvestment ro-admap unveiled by the UPA government has revived ho-pes of aggressive financial sector reforms in next few months. Sharp spurt in P-Notes (Participatory Notes) in the last few months has again sparked fear of “hot money” flowing into markets. Some steps from regulators are not ruled out.
The financial markets are becoming more and more volatile. As the media throws headlines at market participants faster and faster, the stock market reacts by shooting stock prices higher one day and pounding them to the lowest the other day. An investor’s planned buying policy should always dovetail closely with a predetermined selling policy.
Mirroring the change in sentiment in cash market, robust volumes were seen in the derivatives market. Sentiment indicators show continuation of volatility and the current uptrend with minor hiccups. A short covering in Nifty futures saw the index futures trade at a premium to spot by the end of the week.
Hold long positions with S.L. at 4,260 for target of 4590 in the course of settlement.
Realty, banking, technology and auto stocks were in demand.
Stay invested in private bank counters for further gains.
Exposure to STC may impact some PSU bank counters.
A renewed buying interest was seen in real estate counters after the re-rating of DLF by MS. Buy DLF, HDIL and Unitech on declines for short-term targets of Rs 375, Rs 265 and Rs 89.
Auto stocks may continue to move in top gear for present. Use sharp corrections for entry.
After Infosys, TCS also has delivered good numbers triggering buying in IT counters.
Technology counters may witness mild profit booking after the recent run up. Among the stock futures looking good are REC, M&M, Maruti, JP Associates, IVRCL, Tata Power, Lanco Infra, CESC, Zee Entertainment and TechMahindra.
Punters tip Noida Toll, Orchid, Idea Cellular and Tata Communications for targets of Rs 50, Rs 110, Rs 85 and Rs 550.
With disinvestment back on the agenda of the government ‘buzz’ in PSU counters may continue for some more time. Buy on declines BHEL, BEML, BEL and IOC.
Sources tip “golden jubilee” gift from IOC. Selection of a global player for its 3G services may spark buying in MTNL.
Accumulate the stock which displays good Q1 results. JSW steel likely to display strong results and may blast in next trading sessions and keep an eye on it.
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