Mumbai: The markets are likely to consolidate this week after touching record highs following BJP’s landslide victory in Uttar Pradesh (UP) on expectations of a stable government and firm reform policies.
Market investors are seen to be keenly focusing on how foreign institutional investors (FIIs) react to the newly-elected chief minister (CM) of UP, Yogi Adityanath. Selling by foreign investors as a reaction to the new CM of India’s most populous state may break the spectacular rally. So far this year, FIIs have bought $3.98 billion.
Last week the market was also pumped up due to Federal Reserve’s dovish stance indicating that it will stick to its earlier estimates rising rates thrice this year. Buoyed by the Fed decision, the Nifty was up 2.6% to close at 9,160, while the Sensex gained significantly to close at 29,648.99. The rupee also climbed to a 16-month high, up 1.8% to 65.41 per dollar.
Analysts expect the market to consolidate at current level. Rakesh Tarway, head of research, Reliance Securities, said, “We continue to maintain a positive bias on markets but there is likelihood of some amount of consolidation at current levels after a sharp run up across indices.” He said there may be sharp profit booking in case Nifty reverses below the 8,900-mark.
Nagaraj Shetti, technical research analyst, HDFC Securities, said, “Having moved up swiftly this week, there is a possibility sideways move or minor consolidation at the highs by next week. As long as the key support of 8980-9000 levels holds, there is a high possibility of further upward moves in the market in coming weeks.”
D-Mart operator Avenue Supermarts will debut on the exchanges on Tuesday which could bring in additional gush of liquidity in the market. The issue got a record subscription of 105 times, which means it has locked up around Rs1.94 trillion till it is listed on bourses.
The issue was priced at Rs 290-299 per share.
Primary market will be heated again as two issues will open for subscription this week. The Rs 239-crore CL Educate IPO will open on March 20 and Shankara Building Products public issue will open March 22. Shankara Building is aiming to raise Rs350 crore.
HCL Technologies, Engineers India and Oil India stock will consider a buyback proposal on Monday.