Market Khabar

On the back of two major announcements by the government — to recapitalise banks and one of the largest highways construction project named as “Bharatmala Project”, renewed buying from FIIs and positive global cues; markets closed near their life time highs during the week ended.

Benchmark indices Sensex and Nifty rallied sharply by 767 points and 176 points to close at 33,157 and 10,323 respectively.

The broader market, represented by NSE mid- and small-cap indices, outperformed the benchmark indices and closed higher by 3.00 per cent and 3.7 per cent. Renewed buying from FIIs infused positive sentiment. Observers feel that recapitalisation of banks is more of a quick fix solution and doesn’t actually solve the problem.

Consolidation in PSU banks, autonomy of management, and upgradation of tech are need of the hour. It is pertinent to notice that the recap plan is cash neutral and is not expected to affect the fiscal deficit.

Global brokerages are labeling it as India’s TARP — a reference to the US Troubled Asset Relief Program implemented in the throes of the financial crisis.

Near-term trend will be influenced by Q2 results from heavyweights like Tata Steel, HDFC, Hindalco, Bharti Airtel, Hindalco, etc.

Direction will also be dictated by liquidity shift to IPO market, macro economic data like IIP numbers, US Fed meet and global cues.

For the week ahead, chartists predict trading range of 32,750-33,750 and 10,175-10,485 for the benchmark indices. Support is evident at 32,925 & 32,700 and 10,250 & 10,175.