29 Years
Home > Business & Investment > Bulls Going Wild

Bulls Going Wild

Monday, November 03, 2014

The bulls are going wild on Dalal street and there seems no way of reining them in; not atleast with the present raging optimism, matched with the huge FII fund flows that are coming in unabated. The result: A 3.5% rise in a week and over 519 points on closing Friday, something not seen in the near past. The BSE Sensex is at a new all time high at 27865 and the question now is - how much further? The experts believe the upward bias is here to stay and will only strengthen due to broad-base participation in the coming sessions. Dominic Rebello reports...

The benchmark equity indices rose to their all time highs for the second consecutive session last Friday. Experts believe that a combination of global and local factors coupled with the government’s reforms oriented steps will go a long way to boost the economic prospects of the country. The markets got another boost of Friday led by the decision of Bank of Japan to boost monetary stimulus. India being one of the best performing emerging markets is expected to gain from this development.

Reflecting this, both the BSE Sensex and Nifty gained for four consecutive sessions to close at their life time high figures of 27865 and 8322 points respectively, while gaining 3.5% during the last week.

The rally which began with the absolute majority of the business friendly NaMo government in May has led to many policy decisions and reform steps like the labour bill, the decontrolling of diesel prices, easing of rules for foreign investors etc. helping the market grow from strength to strength. The steps taken by RBI and better than expected Q2 results and the easing of crude oil prices too played important roles.The positive vibes from Moody's in their report last Thursday, describing the measures taken by the government and the RBI as 'credit positive' too helped in boosting the sentiment of the market. A rating uptick by the international rating agency is believed to be in the offing.

"It was a phenomenal session for the equity markets as the benchmarks gained nearly two percent on Friday and made a new record high. The rally was led by firm global cues which further fueled by strong results from the index majors. Besides, sentiment also got a lift after international rating agency, Moody, termed recent measures by the government coupled with those unveiled by the RBI on the economic, fiscal and financial fronts as ‘credit positive’ for the economy. We believe this upward bias is here to stay and will strengthen further due to broad-base participation in the coming sessions. However, selecting a stock is the key especially when the markets are trading at life time high level so keep extra caution and prefer index majors & liquid stocks from the Midcap space for trading positions. And, most importantly, be with the trend and avoid contrarian trades,” said Jayant Manglik, President-retail distribution, Religare Securities.

Says Dipen Shah, Head- Private Client Group Research, Kotak Securities. The “Markets built up on Friday’s rally on the back of renewed optimism on fiscal reforms, improved growth in US, liquidity easing by Japan and diminished possibilities of an immediate increase in US interest rates. In the near term, focus will consistently remain on further reform initiatives. The winter session of  Parliament will be closely watched for GST, land reforms, etc. Economic growth in China/Eurozone will engage the attention of the market and the remaining quarterly results will have stock-specific impact.”

“Indian Indices continued to make new make highs and closed at all time highs. Markets were seen up tracking positive US growth data and Asian indices. Markets are seen at new highs on back of positive Q2 earnings by the companies and positive sentiments. IDFC was the top gainer among the Nifty on back of robust earnings while ITC and M&M posted weaker earnings. The Advance-decline ratio was seen at 48:2. Nifty was more driven by Energy space and Banks,” said Kiran Kumar Kavikondala, Director & CEO, WealthRays Securities.

Incidentally this could be the fastest 100 points rise on the Nifty. ”The Nifty has scaled a new record on Friday. It has covered 100 points in a shortest period of time and this rally is going to extend in the next few days as well. Next week Nifty is set to cross 8500. Last Friday's rally was a bluechip- driven rally and the coming week is expected to favour small cap and mid cap stocks,” said Kishore P Ostwal, CMD, CNI Research.

Technically, too the underlying trend displays strongly bullish signals. Most Technical Analysts believe “a 28,500 on the Sensex and a 8600 on the Nifty before the year end cannot be ruled out”. Clearly, it means the bulls are here to stay, atleast till the outcome and announcements that will be revealed during the winter session of parliament, beginning on November 24 and conclude around December 23.

As regards the coming week,Jayant Manglik  is of the opinion that  In the coming holiday shorted week, market would see a lot of data pouring in. To begin with, HSBC Manufacturing PMI data would be released on November 3. This would be followed by HSBC India Services PMI which is set to be unveiled onNovember 5, 2014.Also, auto and cement stocks would be in action for the coming week as these companies report their monthly sales figure.

Needless to say, participants would also be tracking movement in global markets, investment trend of FIIs and movement in currency and crude.Further, in the ongoing earnings season, companies like Dabur India, Hexaware, IRB, Canara Bank, Auro Pharma, Jet Airways, L&T, Marico, Syndicate Bank, UCO bank will be announcing their numbers among others.

We firmly believe this upward bias will extend further and sectors like banking, auto will continue to outperform in the coming week as well. Rather focusing on any particular level in index, it’s always advisable to be with broader trend, which is clearly up. So, any profit taking or decline can be utilized to initiate fresh long positions, but keep caution in stock selection as we are trading at a life time high"

No Comments Posted
City news
Traditional 25-year-old BJP-Sena alliance has col
While the sanctioned strength is 395, there are ...
The Jiyo Parsi Scheme has been launched by ...
I am a male, 41, married, and a father of two. Wh
Dr. Rajan B. Bhonsle, M.D. (Bom)
Consulting Sex Therapist & Counsellor
Dr. (Mrs.) Minnu R. Bhonsle, Ph.D.
Consulting Psychotherapist & Counsellor
Select Sun sign:
Aries (Mar 21 - Apr 20)
Aries (Mar 21 - Apr 20)Financially you feel on top of the world as an expected deal goes through. Travel overseas or news from overseas will be exciting. A purchase of some property or a vehicle will add to your exuberance. With every reason to celebrate there is tendency to over eat that cause health problem. If away from your beloved you are likely to be in touch or plan a surprise visit to be together. Expect an expensive indulgence from the one who loves you.
Tarot for Love
Select Sun sign:
Aries (Mar 21 - Apr 20)
Aries (Mar 21 - Apr 20)What the cards say: Things are on hold. Path: Introspect and know what you really want. Don’t panic or take any decision impulsively. Ally: Taurus will calm you down. Avoid Leo who will push you harder. Card for the week: Tarot key no II The High Priestess. Look and turn inwards and understand your real need and connect. Living at the surface may not give you the satisfaction that you seek.
- Advertising -
Young Indians are increasingly choosing to become
More on Pharmacy
Masters in HR in the UK
Read More