Today is the last trading session of quite a constructive week, says Udayan Mukherjee, Managing Editor, CNBC-TV18. There is no indication that the global pullback has ended, and it continued for the third consecutive day yesterday. Global markets are stable, with the Dow Jones at 14329.49, up 33.25 points, and the S&P at 1544.26, up 2.80 points. It might be too premature to say that there will be no turbulence in global markets through March and April.
Our market has done quite well in the spirit of the mend. Large caps and midcaps have all pulled back quite handsomely over the last few days. The Sensex closed at a 2-week high of 19413.54, up 161 points yesterday. The Nifty closed at 5863.30, up 44.70 points. Today is the RCF offer for sale, the latest divestment offering from the government. So that might be in focus too.
The index has done well for itself. It’s a meaningful pullback already. The low registered just a few days back. I think maybe on Monday or last Friday it was 5660, and from here we are up to 5860 - that’s a 200 point pullback - that’s not insignificant at all. So we have come back pretty much to where the index was on Budget day, around that 5850 mark. I think we probably are good for a bit more, maybe today we extend gains at least in the first half, and try and get to that 5900 level which is the first port of resistance.
I think it is all over to global markets now. If they maintain their benign trend and things look as stable and calm for a couple of weeks or 10 days more, it is possible that the index moves higher. There is no level where you can draw a line in the sand. But for now, I think 5900 is a good point for introspection because markets had corrected, they have come back and retraced about half of their lost ground. This is usually where traders sit back, take some gains from their profits made in the long trades, and then see whether the market deserves to move a little higher.
FIIs have covered up some of their recent short positions which were built around the Budget. So, I think the market has come back to a bit of a neutral kind of gear and we will have to chart its next course depending on how global tidings move. It is not a special market, but has looked good over the last three days because we have been on this rebound or this pull back spree.
The proportion or the speed of the pullback might have surprised a few. The euro has shown a lot of resilience around 1.3 to the dollar. It threatened to break down, but has not quite done that. The ECB chief spoke in fairly confident tones yesterday, so that’s also helped. We had a fairly bad last couple of weeks of February, and now things are on the mend.