Mkt may break range on results, global cues: Udayan

This is Diwali week and had it not been for a Friday's sell-down, the market maybe would have approached this week with some degree of festive cheer. CNBC-TV18 managing editor Udayan Mukherjee explains that though the cheer is not completely absent, the mood is not terribly great or rip-roaring because the market closed below 5,700 on Friday.

So it was sullied a bit as it grinds within the trading range and has not quite broken out as it seemed for a bit last week.
The earnings season continues on a very truncated week of trade. With the market closed on Tuesday for Diwali, the week offers only a few days of trade. So this is not a big week in terms of trading but there are some important results and hopefully, the market should be able to nudge outside this range with some support from global markets. Below is an edited transcript of the analysis on CNBC-TV18. Q: Seems like the market's date with the 6,000-level has been postponed after what happened on Friday. But what about the cues from the global markets?
A: They are not great, but the market stabilised on Friday after posting a significant fall for two days  So there was every possibility of a bit of a rebound at least some kind of flattening. So it is difficult to say whether the S&P has bottomed out around 1,375 in the near-term or there is a more of a downward drift going ahead in November.
The decibel level is just going up on the fiscal cliff discussions in the US, and President Obama's comments on tax hikes and is making the markets a bit edgy on the margin. The metrics indicate that there is a small element of risk-off right now in global markets post the US election results.
The fall in the euro to 1.26 and the Dollar Index holding above 81 suggests that for the moment, there is no great risk-on in the global markets and that risk-on is required now to get the market trading above this range, as we wade past Diwali, sadly is not in place. So a tailwind is missing at this point in time as the market grinds within the range. Q: The market was thrown offtrack on Friday after the disappointing results from SBI, Tata Steel and ONGC?
A: I think the poor earnings did cloud the picture a bit and there was apprehension that the last leg of the earning season will not be great. True to this sentiment, dull results from Tata Steel, SBI and ONGC sort of sullied the mood a little bit and attracted some global selling in a stocks with fresh shorting in a few largecap stocks as well. So it is difficult to say what the market is going to do next.
All it has done is affect a breakout, which lasted the day, tried to hold on to that breakout for a day despite global weakness, but then buckling on the last day of the week and slipping back within that trading range. So, this 50-80 points on the Nifty on either side is not a big move, neither did the market post a huge, dramatic collapse.
But to the extent that there is disappointment from that perceived breakout, I think traders will be a bit leery on trading aggressively long at this point in time. I think most investors would be sort of neutral right now, will keep positions low and keep guessing which way the market will eventually breakout. So it is not a great time for traders to take big positions in the market. That much is quite clear. Q: How do you think the market will open today given the fact that it's an extremely truncated week and the festive cheer all-around?
A: I do not think big moves should be expected this week. Most of the big earnings have played out; globally markets are flat, after the correction last week. There could be some excitement in midcaps this week because the segment typically tends to move around in such truncated situations. But otherwise, I do not see any major impulse for the Nifty this week. It has come back to within that trading range.
Now, every time the Nifty moves 50 points it’s tempting to extrapolate a big breakout or breakdown. But the market has indicated over the last ten days is that it’s trying to make that break above or below that range and is just not seeing any kind of follow-up.
We shouldn’t make a big deal of it, sometimes markets want to consolidate and digest the news developments. It doesn’t owe traders a 3-percent move every week so it's okay.
It's frustrating and boring but that’s the way markets are, you have to accept it. I doubt how traders will take a big directional call right now other than taking small scalping trades on daily basis. You can, at best, broaden the range at 5,580 to 5,800, but I doubt whether there is any great breakout or breakdown should be expected this week.