Markets likely to remain range-bound: Nirmal Bang

The crisis in the Middle East, especially Libya, continues to be a major cause of worry for global economies who fear that the problems in Libya may escalate and spread to Algeria and other countries in the Middle East. Being major oil-producers, the geo-political tensions there are taking a heavy toll on crude oil prices and are threatening to escalate further.

Closer home, the Union Budget 2011-12 brought cheer to the bourses, thanks to key announcements like lower fiscal deficit numbers and no increase in excise duty across the board, among others, by Finance Minister Pranab Mukherjee, which pushed the markets higher.

Lower fiscal deficit numbers indicate a reduction in government borrowings and an increase in liquidity in the system, leaving more scope for corporate and other borrowings. This is expected to improve with the passage of time. Through this announcement, the government has managed to address liquidity concerns in the country.

The markets are likely to remain range-bound, in the coming fortnight, on the back of rising crude oil prices. The Nifty has resistance at the 5,650 level and support at the 5,420 level, and at the 5,380 level, thereafter. Traders are advised to avoid keeping overnight positions open.

Market participants should avoid buying at upper limits. Instead, they should look at buying partially at the given support levels and also on declines.

Stocks like Prism Cement (LTP: Rs 52.15), IFB Industries (LTP: Rs 111), Gujarat Pipavav Port (LTP: Rs 60.15), Pipavav Shipyard (LTP: Rs 80.80), Orchid Chemicals & Pharmaceuticals (LTP: Rs 279.25), Whirlpool of India (LTP: Rs 235.10), SRF (LTP: Rs 311.90), Kopran (LTP: Rs 25.25), KPIT Cummins Infosystems (LTP: Rs 169.35), Suzlon Energy (LTP: Rs 48.50), Gabriel India (LTP: Rs 43.25), VIP Industries (LTP: Rs 543.70) and LIC Housing Finance (LTP: Rs 200.35) look attractive buys and can be bought from an investment perspective.

In the coming fortnight, market participants can expect the Reserve Bank of India (RBI) to announce a hike in interest rates in the Monetary Policy Review.

Sourced from Beyond Market.

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