Markets will look to consolidate in the week ahead after most event risks like monetary policy and budget now over. Global liquidity and domestic macro-economic indicators would now dicate the short-term trend, with the long-term trend remaining fairly bullish.
The global rally in equities continues to see more money being diverted to riskier assets with commodities and emerging markets bagging a fair share.
Technically, the Nifty & Bank Nifty completed the “Golden Crossover” with the shorter term 50 day moving average or DMA crossing the longer term 200 DMA. This signals a long term “Bullish” pattern for markets.
The first index to do the “Golden Crossover” was the US Nasdaq followed by the Dow Jones Industrial Average. Both have only been getting stronger with the Dow now looking to cross an all-time high in the near future. The Nifty was in the range of 5230-5530. The index finished lower by 0.28 per cent at 5317 after touching a high of 5500. The high beta Bank Nifty finished lower by 1.07 per cent.
We should now see the Nifty consolidate this week and the range could be between 5170-5430.
The litmus test would be the Nifty now closing on a weekly basis over 5430, which would again herald the beginning of a new “Bull Market' with 20 per cent rise from the December lows.
Majority of the global indices closed positive. Only two losers were - Shanghai Composite dipped by 1.42 per cent and Sensex down by 0.21 per cent.
Gainers - BSE FMCG up by 2.94 per cent, BSE Auto up by 1.35 per cent and BSE capital goods up by 0.56 per cent. Top three losers - BSE consumer Durables down by 2.20 per cent, BSE Realty down by 1.52 per cent and BSE TECk down by 1.46 per cent.
Factors to Watch:
1. Global Headwinds: Liquidity and High Oil Prices
2. Domestic Macroeconomics: Inflation/Rupee movement/Bond yields
3. Budget Impact on Specific Sectors
4. Nifty range: 5170-5430
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