The Indian markets once again mimicked the global markets that witnessed a terrific bounce back. The Sensex wiped out quite a bit of its Tuesday losses and closed up 365.36 points at 16,387.84. The Nifty crossed the 4,900-mark to close at 4,917.4, up 110.65 points.
The markets gained momentum in the afternoon as the European markets opened on a buoyant note as the global leaders showed earnestness in resolving the immediate crisis in Europe and the US. “Our markets are toeing the world markets and depends on capital inflows and outflows matching. Fundamentals are taking a backseat,” said Mr Manish Sonthalia of Motilal Oswal Financial Service. The markets have broken the 200 day moving average and valuations are not expensive, so one would have to see whether there will be follow up buying.
The next big trigger will be the monsoon, said Mr Sonthalia adding that the macro scene is upbeat for India but the markets scene will be a function of funds outflow. FIIs have taken out in May 2010 in the second highest since October 2008 when they took away $3.3 billion. In May so far, they have taken out $1.96 billion.
Analysts feel that the markets should see a gap-opening on the positive side on Thursday. They have entered the oversold region said Mr Alex Mathews of Geojit BNP Paribas Financial Services. “We may some more uptrend happening on Thursday which can take the Nifty towards 4960 levels but the sustainability of these levels is doubtful,” he said.
Analysts feel the relief rally could perhaps hold for two more days. But there is an uncertainty overhang and the future course hinges on Europe.