Market to remain range-bound

The market had a decent showing and continued to gain ground for the third consecutive week.  The Sensex was up 298.61 points, or 0.85 per cent to close at 35,457.16 points. The Nifty was up 97 points, or 0.92 per cent, at 10,682.20 points. Broader markets saw BSE100, BSE200 and BSE500 gain 0.69 per cent, 0.61 per cent and 0.45 per cent, respectively. The market gained on three of the five trading sessions last week while it lost ground on just one day. The fifth day saw market being flat.

The Dow Jones was under pressure and lost 576.08 points or 2.22 per cent, to close at 25,413.22 points. The rupee continued to gain strength and was up 57 paise, or 0.79 per cent, to close at 71.92. Expiry is still nine trading sessions away and the bulls have an upper hand with the series up 557.30 points, or 5.5 per cent higher.

The RBI has its board meeting on Monday and the fireworks, which were being expected, seem to have fizzled out, at least for the time being. The thorny issues between the RBI and the government seem to have been sorted out in the meetings between the RBI governor and the prime minister and the finance minister. All is well that ends well should be the outcome of the Monday meeting. Keeping fingers crossed, however.

The rollover of commercial paper on the November 14 was smooth and there were no hiccups. The government has urged the RBI to provide some liquidity to NBFCs through a special window or some other way to tide over the fund shortage.

Crude prices continue to be under pressure and this is good news for India. Crude oil producers seem to be a divided on how much of production and what price is ideal for the world. There suddenly seems to be many moving parts to this puzzle and India is certainly not complaining.

Tata Sons has expressed its desire in Jet Airways and talks have been held, though nothing conclusive has emerged yet. Whenever the Tatas do have their way it would be history repeating itself where the group is back with a large presence in aviation, something that they have always cherished. They do already have a presence with Vistara and Air Asia.

The market has recovered from the lows significantly and seems poised for a period of consolidation. Futures expiry is in the following week on November 29. The next big news is the election results on Tuesday, December 11. The period into the results would be volatile while expiry could see profit taking to some extent.

This week is likely to be range-bound and searching for news flow to take some direction. The movement could be mixed with alternate bouts of buying and selling. Maintain the same strategy of buying into dips and selling on rallies.

(The author is founder, Kejriwal Research and Investment Services)

Columnist: 
Arun Kejriwal