Is the mkt rally done or is there more power to move up?

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Is the mkt rally done or is there more power to move up?

After rebounding nearly 19.5% since the debacle of December, the Nifty closed down 27 points at 5335 yesterday while the Sensex ended down 85 points. Is the rally done or does the market have more firepower to climb up a bit more?

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After rebounding nearly 19.5% since the debacle of December, the Nifty closed down 27 points at 5,335 yesterday while the Sensex ended down 85 points. Is the rally done or does the market have more firepower to climb up a bit more?

First a look at international markets:

There was a reversal of fortune on Wall Street as stocks erased their early losses to end higher on reports that Greece could be nearing a rescue deal. The Nasdaq hit a fresh 11-year high.

Meanwhile, European markets ended mixed on the back of Greece's debt concerns. The Euro zone finance ministers are likely meet on Thursday evening to discuss the issues of Greece. Their Monday meeting was postponed to give Athens more time. Speaking overnight, German chancellor Angela Merkel expressed her support to Greece.

In other asset classes:

Crude prices maintain their gains on speculation that fuel demand may increase on account of a drop in us crude stockpiles. it is currently at 116 dollar levels.

Meanwhile, gold gained over a percent on dollar weakness.

In the currency space, the euro rallied against the dollar to trade near an eight week high in closing trade yesterday. 

Moving on to the domestic scene:

CNBC-TV18 learns that Temasek arm - Allamanda Investments- will sell nearly 1.38% stake on the exchange platform today. Temasek will sell the stake around current market price and this is expected to rake in around Rs 1,490 crore.

There are some big numbers expected today. According to a CNBC-TV18 poll, ONGC 's profit is likely to plunge nearly 29% on higher subsidies. However, a one time gain of around Rs 2500 crore on royalty writeback could support profits. From the telecom space, Bharti Airtel may report a strong quarter with a 32% rise in their profits. Tech Mahindra will also declare numbers today.

Agency reports indicate that Mitsubishi- TCS have set up an IT services' joint venture. Mitsubishi takes 40% stake in the JV and TCS takes 60.

There is news that that an EGoM has okayed an additional 1 million tonne sugar exports. It will now seek poll panel nod for additional sugar exports. The EGoM has cut basmati rice export floor price to USD 700 per tonne. Watch out for moves on the stocks.

The coal ministry has raised a red flag over directive to immediately sign fuel supply agreements with power companies. Sources say that coal ministry has asked power ministry to review the power expansion plans of the 12th five-year plan, citing that it will be tough for Coal India to have an equal FSA with each power companies.

Padma Venkatraman
padma.venkatraman@network18online.com