Markets seen moving higher next week

Equities are seen moving higher next week as analysts feel the market has bottomed out and do not see any negative triggers, at least on the domestic front.

With increased liquidity in the system and listing of Reliance Power, investors have only the Union Budget to watch for. As this would be the last Budget the UPA government presents ahead of the next general election, word on the Street is that there would be more positives than negatives.

The main question is that of greater participation, barring an unstable global market.
Over the last five sessions, except Monday and Friday, NSE cash volumes have not exceeded Rs 13,800 crore against the average Rs 18,000-19,000 crore.

“Retail participation will emerge in the run-up to the Budget based on the expectations of various organisations from the finance minister. Under-owned blue chips like State Bank of India, Tata Steel, Tata Motors, Maruti and SAIL are likely to see some interest. Also, the 200-day moving average, which most hedge funds observe, has been tested thrice since Jan 22 and has provided support. So we could expect some foreign institutional buying,” said Amitabh Chakraborty, president (equity), at Religare Securities.

In the month till Feb 14, foreign institutions had net invested Rs 7,377.7 crore in Indian equity. On Friday, when the Sensex closed 348.62 points or 1.96 per cent higher and Nifty up 100.9 points or 1.94 per cent at 5302.90, FIIs bought Rs 261.20 crore shares, BSE data showed.
In the week to Feb 15, both indices closed nearly 4 per cent higher.

“Sentiment is buoyant and selling is getting absorbed. We have not seen any significant redemption from domestic funds recently, which shows equity investment is becoming more preferred once again,” said Shankar Char, head dealer at Centrum Capital.

“Volumes are still low, but I think a steady uptrend will drive volumes this time, rather than the other way around,” Char added.

However, the ailing health of the US economy will continue to spook investors overseas, so one cannot rule out volatility next week. But going by expert opinion the trend seems positively biased next week.