Strong rally on Wall St buoys Dalal St

Positive Cues

• Last week recorded 5 main board listings in 3 sessions

• 4 of 5 issues received excellent response

• Listing beats street’s expectations in terms of gains

• GST, GDP data encouraging

• Strong show in the US markets coupled with political enthusiasm pushed Indian markets to new highs

New Delhi: It was a shortened week at the bourses with Monday being a trading holiday. Markets gained on three of the four trading sessions and lost on one. Sharp gains were registered on Wednesday and were followed up with a strong opening day of December series as well on Friday.

The exit polls for the five States where elections were held indicate a close race, but it appears there is change in the air. On balance the ruling party at the centre is likely to be an overall gainer post the results. This enthused the market and the strong rally in Dow too helped markets.

At the end of it all, BSE Sensex gained 1,511.15 points or 2.29 per cent to close at 67,481.19 points, while Nifty gained 473.20 points or 2.39 per cent to close at 20,267.90 points.

The broader markets saw BSE-100, BSE-200 and BSE-500 gain 2.51 per cent, 2.68 per cent and 2.64 per cent, respectively.

BSE Midcap gained 2.90 per cent, while BSE Small-cap was up 1.91 per cent. The rally was widespread and there were no sectoral losers.

The rupee gained eight paisa or 0.10 per cent to close at Rs83.29 to the US Dollar. Dow had a great week and is now trading at a 52-week high. Dow gained on the last four days consecutively and lost on the opening day of the week. Dow gained 855.35 points or 2.42 per cent to close at 36,245.50 points.

The week saw November futures expire on a positive note. The series gain was a big 1,275.90 points or 6.77 per cent at 20,133.15 points. The first day of trading in the new series saw Nifty gaining a further 134 points.

In economic data, GST collections for November 23 have come at 1.68 lakh crore which is a 15 per cent growth on a Y-O-Y basis. This augurs well for the economy and we are on track to cross 18 lakh crore from GST on an annual basis going forward. Even the GDP numbers were positive and came at 7.6 per cent for the July-September quarter, beating RBI’s estimate of 6.5 per cent. These factors and the strong showing in the US markets coupled with political enthusiasm pushed our markets to new highs.

Coming to the markets in the week ahead, the results for the five state elections would be out by the time you read this article. There would be continuation of the momentum that is being witnessed in the markets in the week ahead. Nifty has made new lifetime highs on intraday and closing basis and the BSE Sensx is not far behind. Expect BSE Sensex to do that on Monday. With new highs, expect the markets to open up new levels of a minimum 3 per cent from the previous highs. Approximately 600 points on Nifty and about 1,800 points on BSE Sensex is what we should be looking at. On the downside decent support exists at 19,800-19,850 levels on Nifty and 66,150-66,300 on BSE Sensex. The strategy would be to ride the rally and enjoy the feeling with markets at new highs.