Fiscal year profit booking, derivatives expiry and lack of strong triggers resulted in a lackluster show by the Indian markets last week with the Sensex and the nifty trading in a very narrow range and finally settling at 28,261 and 8,571 respectively. There were no sharp declines and at the same time, investors were not willing to put more money at the current rates.
Moving ahead, 28000 will be a psychological point for the Sensex. As mentioned in the last week’s analysis fresh exposure should be avoided if the index declines beyond this level. A firm close below 28,000 this week may pull the index down to 27,800 or 26,500. For the Nifty the immediate support is at 8,500and the index is right now hovering around those levels.
As expected the Indian stock markets had a choppy ride last week with the Sensex and the Nifty closing almost 3.25% down at 28,503 and 8,648 – the highest weekly fall in 2015. The fall was due to fears of high inflation, early rate hike by Federal Reserve, crashing rupee and FIIs turning net sellers. Most of the asset classes including equities, gold, currencies and bonds were volatile. Except for the Japanese index, most of the global indices were down last week.
The sensex and the Nifty hit high last week following the surprise rate cut by the RBI chief. But as seen from the closing data, the markets did not sustain longer at the peaks and reversed back as more and more investors started to book profits. This shows that the investors were doubtful about the strength of the surge. However, reading the data for the last 4 weeks reveals that the markets have been logging in gains consistently for 4 weeks now.
Moving ahead, the US job data released on Friday shows that the unemployment rate has dropped to 5.5 percent from 5.7 percent creating at least 2,95,000 jobs in February. The Dow Jones industrial average and the S & P 500 witnessed sharp declines on Friday due to the above data. The Indian markets are yet to react to this news and Monday morning movement will be influenced by this news. With the new financial budget becoming no more exciting to the market participants, the markets are likely to witness some more correction during week. The best thing investors can do is to keep a list of good stocks they’re willing to buy in dips and keep accumulating it as the market drops.
The sensex closed at 29,449 after recording a peak of 30,024 last week. As long as the index stays above 28,000 investors may play safe buying at lows. But a correction beyond 28,000 may bring the index down to 26,500 or 25,000. The Nifty too, went past 9,000 and recorded a high of 9,119 and closed at 8,938. As long as the index trades above 8,500 investors have no reason to stay out of the markets.
Key events during the week are industrial production for January (to be announced on Thursday) the CPI data for February and of course the budget session in the parliament. For the week ahead, a trading range of 28,900-30,000 is expected for the sensex and 8,775 -9,000 for the Nifty and the markets are expected to have a bumpy ride. Continue to buy in dips.
The much anticipated budget is over and we think it was almost in line with what the markets expected. Banking and reality stocks surged on Saturday as the FM delivered the speech. For the week ending February 28th 2015, the markets ended on a flat note at 29,362 (Sensex) and 8,902 (Nifty). Since the budget was in line with market expectations, we must assume that the market has already discounted positive and negatives . In short, we can’t say that there is more room for the markets to surge unless there are strong triggers. Indian markets are now at a premium compared to its own historical average and also against peers such as china and Brazil.
- Point Blank
- Financial Discipline for all.
- Investing Basics
- Shares & Stock Markets
- Introduction to Financial Statements
- Financial ratios.
- Stock investing strategies
- Technical Analysis I
- Technical analysis II
- Before Picking up stocks..
- Choosing a Broker and opening Demat Accounts
- Make your debut !!
- More ... from stock markets.
- Valuation of shares
- Futures and Options - The basics.
- The week ahead: Markets may slip to year-end mood..
- The week ahead : Fed, inflation to swing the markets…
- The week ahead: Choppy ride expected..
- The week ahead: Need more triggers to push the markets..
- The week ahead – Wait ‘n watch until the picture is clear..
- The week ahead..all set for the pre-budget showdown..
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