Nifty has to stay above 8,200 for the rally to continue
We had mentioned in last week’s closing report that Nifty, Sensex are headed higher and that as long as Nifty is above 8,090, bulls will be in control. The major indices in the Indian markets have been moving up a big stimulus to bulls coming on statements by ECB on Thursday of its extending its bond buying programme and that it would not raise interest rates. By Friday, evening bulls got a further shot in the arm when the China announced a 25 basis cut in deposit and lending rates. We expect the market to open higher on Monday.
The weekly trends in the major indices of the Indian stock markets are given in the table below:
On Monday, despite weak global cues, notably in the Asian bourses, key Indian indices opened the week on a positive note, expecting some good second quarter results and easing concerns over a rate hike possibility in the US this month.
Caution over quarterly results coupled with profit bookings subdued Indian equity markets on Tuesday and it led to a marginal fall in the major indices in the stock markets.
On Wednesday, a sudden fall in the Chinese markets and caution over the ongoing quarterly results, coupled with profit booking, led the major indices of the Indian equities markets to close flat after falling a bit in the post-noon session on Wednesday. Both the bellwether indices ceded their initial gains, as investors were seen reluctant to chase higher prices. By the end of the day, additional factors leading to subdued Indian stock markets include diminishing hopes of a European stimulus package and heightened chances of a US rate hike.
Hopes of the continuation of a European stimulus package and lower chances of a US rate hike buoyed Indian equity markets and led to small gains in the indices on Friday. Initially, both the bellwether indices opened higher in line with their Asian peers. Hopes of the European Central Bank (ECB) extending its stimulus package cheered investors globally. Investors' confidence was also restored as the ECB did not hike interest rates during its monetary policy meet on Thursday. After the ECB meet, equity market participants here have concluded that the US Federal Reserve will refrain from raising interest rates during its monetary policy meet. China’s cutting of interest rates has cheered investors globally on Friday.