'Dalal Street may witness consolidation'

Marketmen said traders should trade cautiously this week as lack of any key global or domestic trigger rules out a sharp movement either ways and investors should be careful before making any fresh buying.

“Market is likely to consolidate around current levels as other than the PSU disinvestment news there is no major trigger which may lead to a sharp surge or any downward movement,” Bonanza Portfolio Assistant Vice-President Avinash Gupta said.

Moreover, analysts said volatility is likely to continue over the next two months as foreign institutional investors (FIIs) are resorting to their year-end profit taking.

Taurus Mutual Fund Managing Director R K Gupta said that, “Monday opening would be strong backed by positive cues. But lack of foreign funds would keep stocks range-bound.” The bellwether index Sensex posted its first weekly rise in three weeks and soared 1.64 per cent to regain the psychological 16,000 mark to close at 16,158 points on Friday.

High volatility

Markets witnessed a volatile session last week, notching gains in the last three trades on the back of positive triggers from domestic market after the government pushed ahead with the economic reforms by approving dilution of atleast 10 per cent stake in all listed PSUs.

The PSU stocks remained investors best bet last week as they saw handsome gains after the government’s disinvestment plans and analysts hoping that the upside might continue for some more time.

“Markets are waiting for a trigger for next direction. Till then it would discount the bad news and witness a volatile trade,” SMC Global Vice-President Rajesh Jain said.
Besides, with choppy movement of base metal prices last week, analysts are sceptical over the bullish sentiment in the market and cautioned that all is not rosy for stocks globally.

“Although price of gold is moving up, silver, which is more of an industrial product, is lagging. This goes to show that the market is not fundamentally strong and is lagging direction,” Jain added.

Over the last week, FIIs made net sales but ultimately emerged as net buyers in equities worth over Rs 700 crore. Meanwhile, the global stocks ended modestly higher, despite the US Labor Department report that unemployment had risen above 10 per cent for the first time since 1983.

The Wall Street ended in the green on Friday with the Dow Jones Industrial Average moving up 0.17 per cent at 10,023.42. Besides, S&P 500 index gained 0.25 per cent at 1,069.30 and tech heavy Nasdaq stood at 2,112.44, up 0.34 per cent over previous close.

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