Equity markets consolidate gains, mood remains upbeat

The equity markets continued to be in the consolidation mode as the benchmark index Bombay Stock Exchange's Sensex closed the week at 27,090, up 44.32 points from previous week.

Dipen Shah, head, private client group research, Kotak Securities believes that this is not a bad sign for investors. "Markets have sustained at near all-time highs, which reflects the strength of the market. There was relief on the US Fed not giving any indications of an early increase in interest rates. On the other hand, the moderation on WPI also improved sentiments a bit."

Among the A-group companies, the top gainers were Castrol India (13.88%), Hero MotoCorp (9.76%), Bharti Infratel (9.56%), Oracle Financial Services (9.43%) and Crisil (8.61%).

Among the top losers were Suzlon Energy (14.29%), Jindal Steel & Power (12.12%), Jaypee Infratech (10.47%),  Ramco Cements (9.70%) and ONGC (9.44%).

Foreign institutional investors (FIIs) sold shares worth Rs 9.57 crore, while the domestic institutional investors (DIIs) bought shares worth Rs 84.45 crore as on 18 September.

Major triggers for the market this week were industrial production and inflation data. The wholesale inflation in August rose 3.74% from a year earlier, much lower than July's 5.19%. On the other hand, the consumer price index marginally eased to 7.8% in August from 7.96% in the previous month on the back of decline in the vegetable prices.

However, the industrial production data fell to a four-month low, hurt by lower demand for the consumer durables and weak manufacturing data. The factory output data showed a growth of 0.5% in July as compared to a growth of 2.6% in the same period last year.

The markets, which had reacted negatively to the proposed US Fed plans of raising interest rates, were relieved to see that the Federal Reserve kept its record low interest rates for some more time. The US central bank hinted that it would reduce its purchases of treasuries and mortgage backed securities to $15 billion in October down from $85 billion a month last year.

Alex Mathews, head, research, Geojit BNP Paribas Financial Services, says, "In the coming weeks, the US market data like existing home sales, market manufacturing PMI flash, new home sales, initial and jobless claims will be in focus. Also the GDP growth rate and consumer sentiment data will be watched."

"The Nifty can move up towards 8210-8275 in the short term. Nifty has support at 8040 and 7925," Mathew added.