Mkt getting into consolidation mode: Udayan

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Global cues today morning indicate that the market is headed for another quiet session, says CNBC-TV18's Managing Editor Udayan Mukherjee. "We have had a few very good days on the trot and the market may merely be consolidating its recent gains. We may see a little bit more of such consolidation. Corporate news flow has just waned a little bit as you would expect going into November and December, the last months of the year."

Here is a verbatim transcript of Udayan Mukherjee's comments on CNBC-TV18. Also watch the accompanying video.

Q: It has been just that - it has been a quiet session at best - not that much weakness, not that much by way of a concern on the screen.

A: No there isn't any at this point in time. You will hear some cautious voices on the street but that is opinion more than what the market is telling you. The market seems in fine groove. It has come back to above 5,000. It spent a couple of days above that 5,000-mark. There is some reluctant seemingly to participate at these kind of levels but that is not necessarily breaking the back of the market as you saw yesterday. It corrects a bit intraday and then goes back to where it came from. So I think we are in pretty okay shape for the moment and we probably are just about consolidating which is fine globally and locally.

Q: The real rock though in these past few days in the global setup is the US markets - whichever way you cut it they have been standing pretty tall?
A: The only thing is that, in this part of the world, there seems to be some kind of a consolidation going on. If we just map the Asian markets over the last one week - I know it's a small period of time but we are talking about near term market performance out here - in the last one week most Asian markets have moved in a 1% kind of a range. You look at the last one week - Japan is down 1%, Hong Kong after today's move is up 1%. So with the exception of China, which has spent a lot of time consolidating just about 3,000 and has moved 4-5% over the last one week, generally markets seem to be pausing.

Now depending on whether you are bullish or bearish, you will slice it that way. You may say that this pause is consolidation and then the market will probably make a year-end move because the markets tend generally in a bullish kind of a groove, which we have been in the last six-months, to finish off the years as well.

Or if you are feeling bearish you might call this the pause before the correction because the market is probably just meeting a lot of resistance right now at these kind of levels - elevated levels from the earlier part of the year and the fact that they are increasingly getting range bound in this part of the world is a prelude to some kind of a correction which might come in.

I don't know the answer but you need to take note of the fact that the markets have become quite rangebound across Asia. It might have to do a bit with capital flows in this part of the world, which might have just eased off across Asia, but whatever it is, the markets are consolidating. Bears are calling it a distribution phase. Bulls are calling it a pause before it takes off again and maybe even goes on to intermediate highs before the year is out.

So yes the US is looking very strong. The S&P has crossed 1,100 and closed above that a couple of days. The VIX is very low and there is no great rebound in the dollar index. So the technical elements of global strength are in place but the Asian consolidation makes you pause and reflect on whether at some point we are going to get that correction or is this just a pause.

Q: Which makes you wonder about us because similarly, the two weeks performance for us is great but these past few days have been spotty if quite?

A: One is meeting a bit of resistance clearly at these kind of levels but just look at the evidence of the last seven trading sessions, six days you put on 6%, one day you go flat. That is not the sign of a market which has shown you a lot of tiredness. We have moved even if you take a seven day chart, we have moved 6% that is a strong market. So yes at this point perched just before an intermediate high, it is not easy for a market to have hit an intermediate high, correct 12% and within a fortnight to come back and take out that intermediate high without meeting a spot of resistance. That is very strange behaviour on the part of any market. It happens in roaring bull markets, we are in a bull market clearly in the evidence of the last six months but even so - look at the evidence, we made a top at 5,200 and then we corrected 600 points on the Nifty and now within a fortnight we are virtually 100 points away from taking the intermediate top out.

So some questions are being asked right now on whether the market deserves to get back to 5,200 and can it take out 5,200 and move further ahead from hereon, which is why you are seeing this kind of two-way movement, which crept in yesterday. It is entirely likely and possible and not perhaps very undesirable either if we spent a little bit of time in this zone of 5,050-5,200 reflecting a bit on where we have reached after the pullback, that may take the tone of consolidation. But as we were discussing earlier, is this the sign of any breakdown on the screen? Nothing is visible thus far.