The sensex and the nifty is likely to open on a weak note, following the weak trading of SGX Nifty. This being the budget day, we don’t think anyone would want to trade stocks – we wouldn’t recommend either. It’s better to sit back and watch what the finance minister has to offer and then plan for the next year. Meanwhile, sharp movements are possible in certain counters. If you happen to witness a spike, do not go after it. At the same time, if you see a big drop in excellent stocks consider buying it and averaging the cost down a bit. But such decisions should be taken only after finding which provision of the budget went against them and the impact of such provision in the future.
The Indian markets are trying to bounce back from one of the worst fall in recent times as the benchmark indices hit their biggest weekly fall since July 2009. The key supports at 24,000 and 7,200 were emphatically breached last week and stability seems to be out of place totally as another fresh week commences on Monday. For a sustained recovery, stability must come first but at present, volatility is more as crude oil prices wobble renewing concerns regarding global growth.
Going ahead, the last leg of quarterly results are on and the stock markets are also likely to take cues from inflation data that’s due on Monday and then, the focus may shift to the upcoming union budget. The market will also focus on the rail budget 2016 to be announced this month before the union budget . Until the market stabilizes and shows resistance to fall , it’s better for investors to stay out of the market. The Sensex and Nifty closed at 6,981 and 22,986 respectively last week which is around 24% loss from the peak. The bad news is that more lows may be tested in the coming days.
For the week ahead, we expect a trading range of 22,250-23,600 for the sensex and 6,750-7,000 for the Nifty. Investors would be in a dilemma trying to understand whether it’s ‘stocks o sale’ or is it ‘never catch a falling knife’ in stock markets. What they need to do is to keep track of consistent performers and invest in companies that have given good numbers in the recent past.
Positive sentiments created last week by the European central bank and the bank of Japan failed to sustain the markets from falling and the global rally witnessed in stock markets lost steam again. The Indian benchmark indices – Sensex and the Nifty – closed at 24,617 and 7,489. With unpredictable dollar and crude oil movement, volatility has returned to stock markets and investors need to be very careful trading stocks.
Recovery in crude oil prices, negative interest rate strategy of Bank of Japan and the news that US Fed may go slow on interest rate hikes helped most of the emerging markets to rebound. The Indian markets ended the 1st month of 2016 with a bang, recovering from the setback it suffered in the initial three weeks. The markets ended at 24,871 (Sensex) and 7,564(Nifty) recording an almost 2% jump from the previous week’s close. February derivatives series have kicked off with a bang on Friday.
Going ahead, expectations of the union budget are likely to drive the sentiments from now on. Investors expect a big bang budget from the finance minister which will lay the foundations for a double digit growth. The RBI policy meet this week will also be an important factor in deciding the short term movement. The RBI bi monthly meet is on Tuesday and it is expected to keep the rates unchanged until the budget. The Auto sales numbers for January, Q3 numbers and the rupee-dollar movement are other factors that can the indices to move in the next week.
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