Budget to dominate Sensex, Nifty this week

Uncertainty about outcome of the Budget would dominate markets in the remaining nine days of trading before B-Day.

Besides, wholesale price index-based inflation data and investment trend of foreign institutional investors (FIIs) would set course of markets in this holiday-shortened week. The scrips of HDFC Bank and Oil and Natural Gas Corporation will react to their quarterly earnings on Monday.

Profit-booking could also be witnessed as Sensex and Nifty logged their fourth successive session of gains and regained 29,000 level and 8,800 mark respectively on Friday. Last week was super volatile and had plenty of action be it in the form of Delhi election results or revised factory output data. Global markets saw fresh gains after Russia signed a ceasefire with Ukraine. The markets reversed their correction of eight days and rallied strongly.

Equity markets saw a very sharp reversal Tuesday onwards on expected lines. The Sensex, after falling 1,799 points from the high of 29,844 made on January 30 to the low of 28,044 on February 10 regained 1,049 points to close at 29,095 on Friday. The recovery was of 1,051 points, or 58.4 per cent.

The fall lasted eight days and this was the fourth day of recovery. The Nifty fell by 526 points from 8,996 to 8,470 and recovered by 335 points, or 63.6 per cent, to 8,805. This recovery is expected to continue this week.

FIIs sold equity worth Rs 1,755 crore last week but purchased shares for the first time after about two weeks on Friday.

Domestic institutions bought shares worth Rs 2,095 crore. We have a trading holiday on Tuesday and a mere four days of trading in the week. I expect markets to recover further ground from these levels.

(The writer is an investment analyst) - Mail Today