Markets need local cues to maintain pace

The last week witnessed an optimistic undertone as the bulls prevailed over the bears.

The combined exchange weekly advance decline ratio was
positive as the figures stood at 13,982 : 7,384. The capitalisation of the same on a commensurate basis was also positive as the figures stood at Rs45,138 crore : Rs22,756 crore. The NSE gained Rs231,695 crore in market capitalisation on a week-on-week (w-o-w) basis. In terms of sectoral performance, the rally was led by banking and midcap indices, whereas technology remained the drag on the markets.

Of the entire turnover transacted during the week, 100% was initiated on upthrust days, underscoring the optimism in the undertone.

Overseas investors were net buyers to the extent of Rs14,450.5 crore, and that saw the rupee close at the 51.54 levels vis-a-vis the dollar (previous week 52.71 levels). The US headline indices saw the old economy DJIA gain marginally, whereas the technology heavy Nasdaq gained relatively more ground. The UK FTSE100 witnessed a muted rally in comparison with its US peers. Overseas cues are positive and the domestic markets will need internal momentum to build on the previous week’s gains.

Technically, the domestic markets have pulled back, as was advocated last week in this column. The weekly range advocated for the Nifty between the 4950 / 4450 levels have held as the benchmark trended within these levels.

This week is likely to witness a range of 5025 on the upside as long as the Nifty stays above the bullish pivot at the 4825 mark. In case of declines, the Nifty is likely to test a level of 4550 as long as the bears keep the Nifty below the 4875 levels. Hold longs for now.

lachman.ramchand@gmail.com