The near 8 percent October rally threatened to fizzle out as the Greece drama drove trade for virtually the whole of last week, keeping markets volatile. The initial exhilaration surrounding the euro zone bailout plan faded after the Greek prime minister called for a referendum.
Under pressure, he backed down on a vote and survived the vote of confidence. This is likely to boost sentiments briefly for the global markets. The upheaval that Greece recently faced is leading to talks by European leaders of Greece’s possible exit from the euro zone. The regular meeting of euro zone finance ministers on Monday may provide a clue in addition to sorting out more details about the bailout plans that have already been agreed.
Meanwhile, the two-day meeting of leaders of the G20 in Cannes, France disappointed as no new agreement was reached over how the European crisis will be solved.
Coming to the Indian markets, the upcoming week is going to be a truncated one with only three trading sessions as the stock market remains closed on Monday and Thursday. Stock-specific activities are expected to dominate trade with some prominent quarterly results expected during the week. SBI, Ranbaxy, IOC, DLF, Tata Steel, Hindalco, Coal India, Reliance Infrastructure, Reliance Power and HDFC are among firms that will declare their earnings.
The market has got its dose of surprises from this result season with Hindustan Unilever churning out better than expected numbers, taking the stock to record highs. ONGC too reported a 60 percent jump in profits boosted by lower subsidy payments and high crude oil prices. As expected, Bharti Airtel disappointed, bogged down by foreign exchange losses and its loss-making African operations. The African operations may take longer to stabilise than we had earlier envisaged. SBI shares are likely to react mildly to the news of a two-day strike by its employees this week.
As far as my view on Nifty goes, the trading range has shifted upwards from earlier 4750/4800 – 5200/5250 to possibly 5200/5250 – 5550/5600, while it is safe to assume that we have made a bottom for now.
What seemed like a cakewalk (Nifty touching 5600 levels) a week back is became a daunting task on account of the Greek drama which unfolded last week. However, I continue to believe that the Nifty is poised well for a target of 5600 in the near term, though it is going to be a bumpy road ahead. Investors should utilise the Greece issue to top up their portfolio.
The beginning of a new bull run is always met with scepticism and we seem to be in that zone as of now. Earlier, market men were waiting for new lows below 4700 and now most of them are waiting to see whether the earlier lows would be tested. There could be a scramble to buy beyond levels of 5600 by those who would have missed the initial move, and we could see the markets in a new orbit in the next couple of months.