Analysts reiterate faith in mid-caps in the New Year
Though the benchmark indices of both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) closed Friday on a slightly weaker note, strong rollovers to the January contracts and impending corporate results season have kept the undertone positive, according to analysts.
“The markets look strong. We could see the Nifty inching higher to 4100, provided it closes above 4050 for a couple of sessions. The index may even cross the 4150-levels if Infosys results turn out to be good. The rollover to January contracts has been around 62%, which is a good signal and positions have been pretty decent,” says Jitesh Ranawat, derivatives analyst of Pranav Securities.
Though foreign institutional investors sold equities worth Rs 1,562.70 crore in the last week of 2006, the Sensex closed Friday at up 315.17 points from its previous week’s close as domestic mutual funds pumped in a net Rs 1,717.43 crore into equities.
The 50-share Nifty closed Friday at 3,970.55 points. Both the indices ended the week with a positive market breadth with more than one advance for every decline. However, chartists take weak ending on Friday for a lack of impulse to rally. “The markets may remain range-bound in the near term. Since the indices have ended with no considerable gain on a monthly basis, the possibility of a double top formation and a correction cannot be ruled out. However, much now depends on results and the budget,” says Prem Daga adding that the Sensex will face crucial resistance at 14035 and the Nifty at around 4047. He sees good support for the Sensex at 12802 and for the Nifty at 3658 points.
According to Praksh Kacholia, managing director of Emkay Shares, the markets will remain stable with bouts of volatility. “I do not see any major moves up or down. But I think mid caps are what one has to start looking at as an investment for the whole year.” Emkay has recommended a buy on Spanco Telesystems and Solutions.
The week that was
The BSE Consumer Durables index was the biggest gainer among the sectoral indices. The index gained 5.03% to end the week at 3,574.32 points as shares of Titan and Bluestar registered smart gains.
SAIL topped the gainer’s pack on the Nifty surging 8.33% to end the week at Rs 89.05.
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