Nov series ends with a whimper, experts see a quiet Dec

The November series has ended with the highest ever turnover recorded at Rs 1.59 lakh crore. The Sensex and Nifty are up 4.8% and 5% respectively. The CNX Midcap index and BSE Smallcap index have performed a tad better at 8.5% and 6%. Among sectors, the BSE metal and auto index rose 14% and 11.5%. The gainers pack was led by JSW Steel up 35%, Hindustan Zinc (32%), Jindal Saw (28%), Sesa Goa (25%), and GAIL(18%).

Usually, foreign funds close their books and hence book profits during this period. So, where are markets headed in December? Nirmal Jain, CMD, India Infoline, feels December will be a quiet month for markets. He expects Nifty to trade between 5,000 and 5,180 in December. "It is a liquidity-driven rally and the fundamentals to some extent have supported it. December is generally the holiday month in the US, from where the markets are getting its cues. In December, we will not see the rally in the way we saw in November. The markets should consolidate in a very narrow range of maybe 1-2% next month."

In a worse-case scenario, Jain sees the Nifty finding support at 4,500. "If you have a crisis like the one we saw in January 2008 or in September with Lehman, then the market can go down maybe another 10-15%, or till about 4,500. But if there is a minor crisis, then it may find support at 4,900."

K Ramchandran, CIO, Karvy Private Wealth, and Hemen Kapadia of chartpundit.com, see the Nifty holding on to 5,000 levels. Ramchandran feels 5,000 Nifty is good level for investors to start building their portfolio. "One has to take a longer-term perspective. From that point of view, 5,000 levels are good levels to invest. I will be really very surprised if the market reacts significantly from these levels," he stated.

Sajiv Dhawan of JV Capital Services says the markets are looking tired at current levels. "The only thing that is going to take the markets up in the short-term is either another fresh bout of liquidity, some short covering, or some positive news domestically because the markets do look very tired between 5,000 and 5,100. There has been a lot of bullishness for the month of December, but I cannot see what the fresh trigger is going to be to take us above 5,400 levels over the next couple of weeks."

But Dan Harwood, CEO, Centrum Securities, see the markets trending higher due to the surfeit of liquidity.