Market may consolidate

By Olga Tellis

Mumbai

Aug 3: After a relatively positive week where the Sensex gained 2.8 per cent and the Nifty 2.5 per cent. The Indian markets were one of the best performing in Asia on Friday where the Hang Seng and the Shanghai index were the only major indices that were up.

Despite weak global cues from the US and Asia, the Sensex picked up steam at noon and closed 301 points up at 14,657 while the Nifty closed 81 points up at 4413.55.

It was a happy end to a week that saw the Sensex gain 2.8 per cent and the Nifty 2.5 per cent. But will this relative positive flavour sustain in the coming week?

This week could see consolidation of the market according to analysts, that is, if there is no serious negative global news and crude prices continue to come down.

Mr Alok Agarwal, head, research, K.R.Choksey Shares and Securities Limited said the market could move in a positive zone and with positive news flow from the government side because of the pending bills in Parliament.

The government is expected to be very active this week. "Even if it gets half the Bills cleared it will be a positive development," he said.

The only problem at the macro level is the continuing inflation pressures and the high crude prices.

Though they are weakening, they are still in the $120-125 range.

Mr Bhavesh Shah, vice-president, research, Asit C.Mehta said "It is too early to say whether Friday's bounce back is a long or medium term trend."

There was a flow of good news but earlier the markets were down because of high crude prices, inflation and uncertainty about what steps the RBI would take.

All this is over for now, he said and also most results were according to expectations of the analysts.

"If the good news flow continues for some time then we can see a recovery.

But the market will remain in the range of 12,500 and 14,500 for August," he said.

The Sensex market cap at Rs 42 lakh crore had fallen below the GDP which in March was Rs 43.5 lakh crore.

It has now become Rs 47 lakh crore and is an important barometre for finding ou where the market is heading, says Mr Agarwal.

Analysts generally feel that the markets had been battered all these months so there is a limit now to the downside.