MUMBAI: With the global market picture showing signs of improvement, the mood in the Indian stock market is likely to remain upbeat in the forthcoming week as well. The fourth tranche of advance tax payments from India Inc will be known Monday, which would set a fresh tone for the market. The advance tax numbers for this quarter are expected to be healthier than the previous one. Automobile, cement and telecom companies have reported higher monthly sales in the last two months.

“The market (Nifty) is currently trading in a range of 2700-2850. As long as the Nifty sustains above 2650, the range will be maintained. However, if the index is not able to break 2850, then the current rally could be punctured. But if the Nifty manages to cross 2850, then the next target is 2950,” said Bharat Dalal, fund manager at Dawnay Day AV Financial Services.

Indian equities rallied nearly 5 per cent on Friday to post their biggest rise in three months, as hopes for a recovery in the battered US banking system boosted investor confidence across the world.

Bombay Stock Exchange’s Sensex ended at 8,343.75, higher by 5.17 per cent from a week ago. National Stock Exchange’s Nifty closed at 2719.25, up 3.78 per cent from the week ended March 6.

The mood across the globe has been notably different this week than at any time since the financial crisis became acute last October. Positive comments from Bank of America helped sustain the market optimism that was stoked earlier this week by positive comments from Citigroup Inc and JP Morgan.

However, investors are still wary of calling an end to the bear market and remain on guard for any news that may knock sentiment.

Dawnay Day’s Dalal cautions that this is just a bear market rally, which is more a result of short covering. Once the bear market rally ends, then October lows could be revisited, he warns. He expects this rally to continue till the end of March, unless the scene on the global markets turns murky again.

DD Sharma, senior vice president at Anand Rathi Securities, said that “markets have responded positively to a raft of fairly good news this week. But the markets continue to remain a slave to any news that could mar or boost sentiment. At a time where we have learnt to fear and forecast the worst possible scenario, even the smallest bout of good news helps to reverse the market mood. However, given that the sentiment has remained in favour of a rally, Indian markets could keep up the good work next week as well.”

Sharma adds that the beaten down banking, realty and auto stock will continue to show signs of recovery going into next week.

source: Economictimes

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