A bright Monday morning is in the offing as the bulls seem to be in a mood to trespass 5100 comfortably and not be prosecuted. Friday’s smart gains in the US following an encouraging jobs report and higher Asian markets will do the needful as far as opening gains are concerned. European stock benchmarks have also posted healthy gains.
Remaining comfortable above 5100 remains a challenge; but given the momentum in recent times flirting with 5200 seems on the cards shortly. On the downside, 5000 remains a good short-term support.
Overall sentiment has improved slightly post the better than expected Budget. However, in the near term, the market could face some resistance at higher levels. Valuations are not cheap and uncertainties persist on the external front.
On the macro front, things are shaping up well, but much will hinge on how the monsoon unfolds. Concerns over inflation and its fallout on the monetary policy will continue to play on investors’ minds.
Among the factors that could add to the positive sentiment today is the announcement that SEBI has decided, in principle to allow the Stock Exchanges to introduce physical settlement of equity derivatives. However, it has not set any specific timeline for launching the same. The capital market regulator also permitted the Stock Exchanges to introduce equity derivatives contracts with tenures up to 5 years, besides allowing them to introduce derivative contracts on volatility indexes with a suitable track record.
