SENSEX has closed above 40K mark for the second time. Will the uptrend continue?
It doesn’t look like the momentum will continue as we have a slew of negative news hitting the market like the core sector output going down 5.20%. Under utilization of capacities not pushing private capex.
Rumours like new buyer in Yes Bank, fund infusion in Tata Motors, pushed up the indices. Markets also had a broad based rally as laggards did a catch up as the bottom for the market is now established.
All the big stocks that helped the markets move up have been showing tiredness on their price moves. There has been no big push on their September quarter results. All the profits that are coming in the results are mostly due to tax cuts for manufacturing companies and losses in the banking space again due to the same tax cuts.
Sales growth in the economy is slow. Off the results that are out so far, there is a little less than 5% growth registered. It is not a good sign.
What all of these developments are showing is that, we will have a market that will keep hovering in the range that we have established between July and October. Only if there is a significant buying power will the trend change for good.
At the same time, our markets will not breach the low we have established in the recent months. That assures of no big losses on the investments, while it requires patience to see gains.
As of now, there is no visibility of any sectors taking leadership, which is another concern. If the whole economy is a mixed bag, there will be more confusion than clarity.
So the wait continues…..