Comment

The market recovered strongly as the budget was well-appreciated by traders and the investor fraternity. Pre-budget nervousness had resulted in caution, indicated by less long positions on market.
Nifty discount, too, helped the market move up as short covering boosted sentiments further.

Auto, banking and infra sectors got a strong push as negative expectations before the budget helped them after the event as actual proposals were not too negative. Even the realty sector moved up as heavy shorts got covered despite concerns over service tax.

Nifty range of 4600-4900 firmly broke on the upward side as call writers of 5000 and 5100 series rushed to cover their delta. Put writing picked up in the 5000 series, indicating strong support in the 4900-5000 range should the market correct downwards. The volatility has fallen to 20s as hedging declines.

Fresh build-up has been witnessed in infra, oil & gas and banking.
Among individual stocks, ONGC, Reliance Infra and Tech Mahindra look very strong with fresh longs. In mid-caps, Andhra Bank looks strong.

In the medium term, Nifty appears set to cross the 5300 level and head towards 6000.

(The writer is director - institutional equities and chief strategist, Fiduciary Euromax Capital Markets Ltd)