Market in Sept: Watch data carefully, say experts

Moneycontrol Bureau

The market gained solid ground today, as traders played catch-up with strong global cues after a two-day break.

The Nifty closed just below the important 5,050 resistance at 5,040, up 39 points. The Sensex, meanwhile, ended trade at 16,821, up 144 points.

Both indices closed the week up over 6%.

However, it was not all smooth sailing for the Indian equities. The market was a bit nervous ahead of the all important US jobs data, which is slated for a Friday release.

The employment report is expected to show a gain of only 75,000 non-farm jobs during August, with the unemployment rate steady at 9.1%.

Any significant increase in unemployment rate may attract selling pressure.

But at least the US has avoided recession, which was a big concerning factor, said portfolio manager PN Vijay. "I think September should be a middling month. People will be seriously watching data, in the sense, which way it's going," he felt.

Vijay does not see much upside or downside in global markets. India, on the other hand, is likely to have a good time in September, believes Vijay. "The perception is that the worst is behind us and the slippage in the GDP and industrial growth has sort of been factored in," he said adding, "...probably it (market) could move up 2-3% in the month."

Next week all eyes will be on the Reserve Bank as it meets to discuss the credit policy. The market is expecting the central bank to hike rates by another quarter of a percent.

"A 0.25% increase by RBI with slightly less hawkish statements would be good for the market," Vijay said.

A lot would depend on the kind of data we get in the next couple of days, feels Radhika Gupta, director at Forefront Capital Management.

"I think payroll data has already got the market jittery. If that is much worse than the 75,000 number, then you might see this pain continuing. In the short-term, you are not going to see a sudden rally back to 5400-5500 but you might see us consolidating in this 5,000-5,100 range," she said.  

Absolutely right, said Manoj Murlidhar, head of derivatives at IIFL PReMIA, who feels, profit booking might come in at 5120 or so. "Ideally, 5050 would be more on the upper side of this range. I think people trading long should start hedging their position by buying money put," he advised.

Though valuations are reasonable, it remains to be seen whether the rally sustains in the next week given pressure points like firm crude prices, high inflation and softening of economic growth.

Sagar Salvi
sagar.salvi@network18online.com