Markets set to consolidate this week for sustained rally

Sudhir Shetty

Mumbai, Oct 14: Catapulted bourses are expected to apply brakes and have a breather this week, traders say. Analysts see the market consolidating from the current levels to build for a sustained rally in the coming days. Brushing aside the fears of the US-led retaliatory attacks, the market saw a smart rally last week buoyed by strong results posted by Infosys Technologies and unique debenture bonus announced by Hindustan Lever.

The buoyancy was so dominating that the Sensex climbed over 7 per cent in the last four trading sessions and closed at 2959.39 points on Friday — up 146.49 points, week-on-week. The foreign funds purchased shares worth Rs 243.70 crore in the first four days of last week and shares worth Rs 451.80 crore till October 11.

The week gone by also had some negative impact. In mid-week, Morgan Stanley Capital International proposed to cut India’s outlook by reducing the weightage by 0.93 per cent to 6.2 per cent as against the existing 7.2 per cent. But the market players took this on its stride and ignored the move. The new weightage will be effective from November 30, 2001. Technical analyst Mr Hitesh Sheth of Prabhudas Lilladher said: “The correction is due and it might last for next couple of days or so. But the nature of correction would be healthy, taking into consideration the rise of 300 points in the last two weeks.”

“The market might go down up to 2850 points next week and subsequently recover and might try to breach the psychological barrier of 3000-levels later during the week.”

“Despite the sentiment slightly better than what it used to be around 2 weeks back, investors and traders are sceptical to build a concrete long position as the outcome of the war is still a difficult call,” Mr Sheth added. The upbeat in the market was also on strong buying by foreign funds in sectors ranging from IT, petrochemicals and domestic pharma companies. Mr Anthony Sequiera of Arcadia Share and Stock Broker said: “The market might move in range with no surprises in form of runaway gains or a steep fall. We might see some buying happening in cement stocks.” There were reports that cement prices were expected to go up in the range of Rs 5-8 per bag with immediate impact on improved sentiments following higher dispatches in the Sept.