Market pins hope on reforms, global cues

After a rally last week, market is likely to consolidate this week. Except for manufacturing data, there is no major economic event scheduled for the week and, therefore, for the ongoing rally to sustain, investors could only pin hopes from the winter session of the Parliament where many reforms will be tabled this week. Global cues would also be noteworthy.

“Market has started factoring in some further announcements on fiscal reforms with the deadlock on retail FDI issue being resolved and discussion expected to happen next week. We will watch out for further fiscal initiatives, more so, on core sectors. Initiatives in areas like infrastructure, land acquisition, GST, mining and power will support sentiments,” said Dipen Shah, head of PCG research at Kotak Securities.

Sensex and Nifty surged 4.50 per cent each past week, after Moody’s and Goldman Sachs said they remained upbeat on India.

“Nifty had managed to overcome the 5,800 hurdle last week, thanks to a bout of short-covering and renewed buying interest. With the quarterly earnings out of the way, market sentiment will be driven more by liquidity flows and prospective government moves on the policy front. The main indices could turn range-bound and consolidate in the near term after a 4 per cent rally past week,” said Amar Ambani, head of research, IIFL.

Data showed foreign institutional investors (FIIs) remained net buyers to the tune of Rs 9,577.20 crore in November, compared with Rs 11,364 crore in the preceding month.

Gaurav Dua, head of research at Sharekhan, pointed, “The debate on FDI in multi-brand retail under rule 168 entails voting will take place in the Rajya Sabha on December 6 and 7. Shares of private sector bank will be in focus as the government tables the Banking Laws (Amendment) Bill, 2011 in the ongoing winter session. The other important financial sector reform bills to be tabled include insurance and pension bills.”

Amid reforms talks, Vivek Mahajan of Aditya Birla Money, said quality stocks in private sector financials, discretionary consumption like autos and consumer durables, pharma, IT, media and agri-commodities, like tea, are likely to continue to do well.

“In the near term, the possible upshot could be the insurance bill, leading to a hike in foreign investment in insurance from 26 per cent to 49 per cent and the pension bill getting passed in the Parliament. With a few clouds getting cleared on the global front and renewed optimism on domestic economic reforms, the pace of foreign portfolio investment inflows are likely to accelerate after slowing down for most of the last month. Risk taking looks likely on the cards,” Mahajan said.

amitmudgill@mydigitalfc.com

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