Market seen in consolidation mode for few days: Udayan

We will have to see whether the market needs to consolidate for a few more days before it attempts to take that 5,650 level out with some degree of decisiveness. But the interest levels are much higher; a touch of volatility might have crept in over the last three-four hours, said CNBC-TV18’s managing editor Udayan Mukherjee.

There is no data point in the global market situation which signifies that we are turning around from here. They have had a great run, the S&P has run very quickly to 1,460-1,470 level and it’s just chosen to pause there, which is fine.

A little bit of digesting of recent gains is not such a bad outcome altogether, yesterday the drama was playing out in the commodities market that precipitous sudden fall in crude oil, but that got arrested.

Even if you look at things like gold, there is a mood of profit taking after the recent run up that we have seen in many asset classes. We have had a good run as well out here. Consolidation is the name of the game for the next couple of days, but there is nothing on the screen which is suggesting a u-turn just at this point.

The Finance Minister is at least pulling out all stops to make sure that this government gets back on track. I hope it stays that way and all indications are that it will. Today we will hear from Mamata Banerjee and she is mercurial that she is I do not know what to expect. But even if she has to go down and I guess she will go down fighting and she will make a lot of noise. It will be a big loss of face to set a 72 hour deadline and then to back off with a whimper, but I do not think the government in a mood right now to relent. They are very much ascendant at this point in time and they know the numbers favour them.

Thankfully, it is just the TMC which is making most of the noise we are not seeing those kinds of hawkish noises coming in from the Samajwadi Party. So, even without the TMC this government stays. Many would say that it would be good riddance if TMC were to walkout of the government and the government can go ahead with many more measures which have seemed undoable so far.

The government is strong right now. It seems unlikely that they will relent, which is great from a market perspective. After today, once the TMC news dies down the government would have successfully called off the bluff of many of these parties. I wish they had done earlier because if they can do it now nothing has changed politically with the equations and the numbers.

If this has happened six-12 months back it would have been better. But as they say, better late. Today, the curtains come down on the political drama and then we can put that to rest with fears of a rollback having abated. We can move forward from here and that would be a great outcome.

Today, the Nifty might do a little bit of work around this 5,650 level. It’s the high for the year. The market respected that yesterday, but I do not think you should read too much into it, just at this point.

The markets had a very good rally over the last few days from that 5,400 to 5,650 and maybe it’s just pausing around that level. It is much more important to see what is going on with the interplay of stocks in sectors in the market. It is little irrelevant for people to start tracking the Nifty again.

The Nifty may pause at 5,650 or may take it out over the course of the week. It may make its way to 5,800-5,850 over the next few days and weeks. That is fine; you might get another 3-4%-4-5% in the near term, in the next month or so.