Range-bound run on the cards

Equity indices are seen range-bound with a positive bias Thursday. Shares of banks and automobile companies are seen extending gains, dealers said Wednesday.

Profit-sales are not ruled out as the indices have gained over 5 per cent since the beginning of the current month, they said. The Bombay Stock Exchange Sensex on Wednesday closed at 6016.58, up 19.88 points, or 0.3%, over Tuesday.

The National Stock Exchange 50-share Nifty ended at 1888.65, up 9.65 points, or 0.5%. Dealers said that as the Sensex has closed above the 6000-mark, the next resistance is likely to be at 6050.

"6050 is a crucial resistance. If the market doesn't falter, a further upside of 150-200 points from there is possible" said a dealer with a city-based brokerage firm.

"There are no sell triggers in the market. However, lack of buy triggers could also cause a downslide," said Vimi Chabria, dealer, Quantum Securities. Vimi sees more momentum in mid-cap stocks and feels that bank and automobile shares could rise further.

"The movement will be largely stock-specific. If the Sensex manages to stay above the 6000-mark for the next three to four sessions, the index is expected to move up further," said Gopikrishna Shenoy, head-institutional sales, IDBI Capital Market Services.

Shenoy is bullish on the information technology, shipping and metal stocks. Many dealers are of the opinion that a correction is due anytime now.

"The market (Sensex) has moved in one direction. Therefore, a 100-150 point correction is expected. Otherwise, we are likely to see a big fall in a single day," said a dealer with a city-based brokerage.

Dealers said other than high crude oil prices, there were no major concerns.

On the New York Mercantile Exchange, light, sweet crude oil for December delivery eased by $0.35 and was trading at $46.11 a barrel.

Dealers said there have been sustained inflows from foreign institutional investors and these inflows are seen rising in the coming months.

FIIs have been net investors for the last five months. So far in November, they have poured in $767.3 million in Indian equities. The FIIs invested $875.9 million in October, $601.2 million in September and $612.5 million in August.

Tuesday, FIIs bought stocks worth $78.1 million.

According to technical analysts, 6050 and 1900 are the immediate resistance levels for the Sensex and Nifty, respectively.