INSUBCONTINENT EXCLUSIVE:
Markets during the week have marched higher and higher with low volatility in a show of strength despite fears of higher interest rates,
rising crude prices and inflationary tendencies
Also, FIIs seem to have given up and changed their stance by turning bullish, which is clearly depicted in their rollover statistics
There are instances in history wherein negative correlations have happened in the past wherein the Nifty had risen and the rupee weakened,
but that did not last long
Therefore, sooner or later, either the rupee will give in or the Nifty
Axis Bank reported a surprise Q4 loss of Rs 2,189 crore and had the worst performance among private banks
However, surprisingly the prices moved ahead and reacted positively, which is a signal in itself that the bulls are in full control of the
Numbers in general were good and as per expectations, with UltraTech, Indiabulls and other NBFCs reporting an encouraging set of numbers
keeping the spirit of the market high.
Key Events of the WeekThe 10-year US Treasury yields touched a 4-year high of 3 per cent
This supposedly was the main concern of the market
But based on the past track record, interest rates nearing around 4 per cent is a cause of worry for the equities
So, the current panic is premature and unfounded, more so when inflation in the US is still around 2 per cent, a good sign that interest
rates will not rise too fast, too soon.
Technical OutlookThe Nifty50 has broken out from a strong resistance level of 10,650, which should
ideally lead to a further rally till 11,000
But sometimes such breakout also turns out to be a failure and reversal can also occur
Traders can take long positions with a tight stop at 10,500 and in case stops are hit, short sell could be initiated with high recorded as
There are divergences between sectoral indices and therefore, the rally to 11,000 will not be easy and straight
Expectations for the WeekThe fact that markets have risen by 6 per cent from its bottom in spite of negative global onslaughts indicates
that they have truly discounted a good set of corporate numbers
Going ahead, the main trigger for the market would be mid-May election results, which could swing the mood either way for our indices
Investors should stay on the sidelines and wait for the market to correct before taking long positions
The Nifty ended higher this week by 1.21 per cent to close at 10,692.30.
