All is well for mkt; Nifty may see 6000 today: Udayan

Yesterday was a very a volatile session, but Mayawati saved the day for our market. In the afternoon, she said that she would vote in favour of FDI in retail in the Rajya Sabha. 

After those magic words the market turned around and closed above 5,900. All is well as we go into trade today; it is the last trading day of the week and who knows we might touch 6,000 today, said Udayan Mukherjee, managing editor, CNBC-TV18.

The government should now capitalize on this. The vote is through practically. In itself it does not mean anything, but technically this could be a political breakout point for the government as well and they should treat it as such.

Today, this one has put to bed. Next week they should just go at it with some degree of energy and momentum, get everything that is pending right now, which can be done. They have already set the stage for the Banking Amendment Bill, we could do with a few new banking licenses, they should move on that pronto. National investment board (NIB) is in discussion, they should try and push that through as fast as possible.

I do not know why the urea investment plan has not been okayed yesterday, but that should get done. I am hoping they can do insurance as well during this session.

Come Monday, that is when the clock starts ticking because this hump has been crossed; we have passed through a really strong congestion. What they can achieve in the next couple of weeks is far more important than what has happened with FDI retail.

Given the way states have autonomy on FDI retail, it is very unlikely that this is the big one for India but what may happen over the next couple of weeks might have far deeper ramifications. I hope the government seizes the moment and in the next two weeks we can see a lot of good work that has been pending for two years.

We talk about the congestion zones where it is like a spring getting wound so this spring has been getting wound for 18 months, there has been nothing which has happened from the political spectrum. So, it is an 18 months kind of a range that the politics is coming out of. After that a breakout, it should be a significant breakout. This is the session, which can actually make a big difference.

I am hoping that Monday onwards we’ll probably see some real action from the government. This winter session might go down in history as one of the sessions, which did something for the economy for a change. May be we got through FDI in retail, may be on hindsight we would have got through insurance.

I am not saying that pension bill will go through - that’s a sticky one and there are some others which might not go through, but if NIB, retail, insurance went through this winter session then it would be great.

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The market has priced in some bit of good news from Delhi, but it is hungry for more and therefore every time there is a whiff of something more happening, it reacts immediately with some kind of a move higher. If some business in the winter session is priced in by the market and then there would have been disappointment if that did not happen.

But may be the market did not price in such a smooth passage through the Rajya Sabha and there is a small element of surprise out there, which if the government can capitalize on next week and the week after that, the market may make a move beyond 6000 into a slightly higher terrain.

Things are complicated because yesterday volatility picked up, you could see lot of intraday volatility. There might be a suggestion that markets are reaching a point despite good news where things are beginning to reach some flash points and that ties in with what global expectations are as well. It may not be an easy ride up, but there is hope that something that New Delhi does over the next few days might see the market getting to 6100.

 

The market struggled in the morning. It was an important day because in the morning it looked vulnerable, a lot of the bullish traders might have just got shaken out of their positions. I imagine people on the market would have been wondering if this is the start of a big correction which is being alluding the market for so long. But it turned around in the second half of the day. Anybody who went short in the morning would have been forced to cover up and that has a dynamic of its own.

Momentum is back, if global markets permit us and local newsflow is supportive as it looks like, it will be for the next few days, we could easily get pass 6,000 in the next couple of days. Even yesterday the Call writers who had written 6,000 and 6,100 Calls were unwinding. The feeling in the market is that we are going to get to those levels right now. There is no point fighting the tape even for the people who feel the market has got overheated in the near-term.

Flows are strong, momentum is good, and mood is good after what has happened yesterday afternoon. The market can roll on a bit longer, maybe another 150 points is there for the taking.

At some point, though everybody will get too optimistic and already the meter is swinging from a lot of skepticism to too much optimism. We will get there once we get to 6,100 kind of levels. There one may want to just assess the situation once again and see if enough is enough just for this run.