Indian markets started the last week on a strong note but turned volatile by the mid week as invetsors started to book profits. Due to lower inflation numbers , the hopes of a rate cut by the RBI is flying high and the overseas investors have kept the buying pressure up . Overseas investors have so far pumped in 16500 Crores into the market. As a result, the indices closed at 25,338 and 7,717 for the Sensex and Nifty respectively.
The Indian stock markets extended the positive streak to the third consecutive week closing at 24,953( for the Sensex) and 7,604 (for the Nifty) thanks to rising crude oil prices , renewed buying from FII’s and all round positive cues from around the world. The market sentiments also got a boost when the US fed decided to keep the rates unchanged and decided to reduce he probable number of rate hikes in 2016 to 2 from 4.
Going ahead, this is a holiday shortened week. Markets will be closed on Thursday and Friday on account of Holi and Good Friday respectively. Since there is no economic data to be published in the first three days of the week , it would be a silent week ahead with range bound movement.
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.
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