Mumbai, March 19: Everything depends on how the Nasdaq behaves on Monday,'' was how a dealer with a city-based broking house reacted when asked about the market's probable course when it opens on Tuesday. Market players, in unison, are eagerly waiting for Monday night's trading on the Nasdaq, which has recently emerged as the bourse to look at for directions for the domestic market, and for the technology stocks in particular.Over the last three weeks, as the global investor turned away from technology stocks, the tremors were felt in India also. Post-budget, the Sensex has lost close to 800 points and the technology stocks here are also a battered lot. However, according to a market analyst, it is an observed phenomenon that whenever the markets go up sharply and then continues for a substantial period of time, usually a 12 to 15 per cent fall in stock prices follows such appreciations. ``Going by the same trend, we can expect the market to enter a consolidation phase soon,'' said the analyst.
However, a section of the market feels that even if the global trend of hammering technology stocks continue, good opportunities for investments are emerging in the economy and the FMCG stocks. According to a BSE broker, a number of FMCG and cyclicals have tested bottoms strongly and downsides in these stocks are limited. ``So even if the infotech stocks try to pull the Sensex to sub-5000 levels, the defensive sector stocks are likely to give some support to the index,'' said the broker.
The FII investment flow is also a big concern for the broking community. After the budget, FII activity has been very unpredictable and was in the form of bouts of buying and selling. Compared to the current month's FII investment trend, February had witnessed the highest amount of FII inflow ever. In February, net FII investment was around Rs 2000 crore.
Market players feel that if the FIIs also follow the global trend of turning away from technology stocks, they will at least pick up the non-IT stocks. This again will give some support to the Sensex.
The market is also speculating on some major announcements to come in during the US president's visit to India. And the sectors which are being talked about are software, heavy engineering and defence. ``We are expecting some easing of sanctions which will benefit the defence sector and also the heavy engineering sector. On the other hand, some major announcements, in the form of tie-ups and orders to specific companies are also being talked about in the market,'' said a dealer with a broking house.
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