New Delhi: Indian equity benchmarks witnessed the biggest rally on the second day after the budget especially on stabilized crude oil prices, short covering by FIIs, lower-than-expected fiscal deficit and the borrowing program set by the government for FY12. The 50-share NSE Nifty gained 189.05 points or 3.54%, to settle at 5522.30. The 30-share BSE Sensex shot up 623.10 points or 3.5%, to close at 18,446.50, after gaining 655 points in an intra-day trade.
In the opinion of Deven Choksey, MD of KR Choksey Shares and Securities Pvt. Ltd., the market needs to carefully observe the structural changes that are happening on the fiscal deficit and subsidy front. According to him, if management of fiscal deficit and subsidy is taken care of, then the markets can witness increased amount of confidence and stability including the fact that the budget is growth-oriented.
Talking about the crude oil, he said, “The crude oil could totally decide the market trend but if the crude oil prices fall down then probably we should see the stability back in our markets, at least the selling from FIIs would stop to a certain extent, if not entirely.”
He also added that the market’s rally was supported by the short covering. “I think the crucial level for the Nifty would be somewhere around 5560 level,” he said adding that the overall mood will remain reasonably positive for a while.
The Nifty has strong resistance at 5600-5650 and the market will very shortly trade above 5600 or probably around those levels. It is unlikely that the Nifty will go lower than 5230, said Mitesh Thacker, Technical Analyst, miteshthacker.com. “We have been positive on the broader market,” added Thacker.
Pashupati Advani of Advani OTC Dealers was surprised by looking at the market strength today. He also mentioned that the rally was backed by short squeezing. Reacting on the budgetary impact on the Nifty’s rally, he said, “The pre- budget worries have gone away, so we are back at this 5400-5500 type levels.”
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