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The stock market is likely to take a breather after a roller-coaster week of surprise central bank announcements.
Analysts expect a week of consolidation, with the broader markets moving in a range of one to two per cent. “The markets are expected to trade in the range between 5,900 and 6,100,” said Ashish Chaturmohta, head, technical and derivatives analyst, Fortune Equity Brokers. The NSE’s Nifty index ended the week at 6,012.1, while the BSE’s Sensex ended at 20,263.71.
The Sensex rose nearly 700 points on the day after the US Federal Reserve decided to extend its monthly $85 billion stimulus program. It then dropped by nearly 600 on an intra-day basis, after RBI chose to raise the repo rate. Equities are expected to be relatively sedate, ahead of the expiry of the monthly derivative contracts on Thursday, according to analysts.
“There are now no big triggers for the market, except for the September quarter results which are still three weeks away. One can expect more stock-specific action ahead of expiry, which is only four sessions away,” said V Balasubramanian, vice-president and fund manager, IDBI Asset Management.
“There is no clear direction, though there is limited scope for upward movement in the market, as valuations have become expensive,” said Ramanathan K, executive director and chief investment officer, ING Investment Managers.
The NSE Nifty on Friday closed down 1.7 per cent, bringing the weekly gains in the index to 2.7 per cent. The BSE Sensex ended the day down 1.8 per cent, bringing its weekly gains to 2.7 per cent as well. Foreign institutional investors were net buyers on Friday at Rs 945 crore.
“There could be an increase in foreign flows but not to a great extent, as they have already pumped in a lot of money,” said Balasubramanian.
On the sector front, analysts said the rally had been broad-based and even beaten down sectors had rallied significantly. For the week ahead, they said the automobile and banking sector will be watched, as a lot of short-covering activity is expected to push prices up.
The BSE auto index was up 2.4 per cent through the week.The BSE banking index rose about 4.9 per cent during the week, after having fallen by 16 per cent through the year.
