Sensex may test 14,000

Sensex surged 148 points to 13,844.78 on Friday (1 December) following a good rollover in the derivatives segment from November series to December series and on decent to strong auto sales figures for the month just gone by. The barometer index is now just about 150 points short of the next psychologically important level of 14,000. Nifty hit the psychologically important 4,000 mark on 1 December. It ended slightly below that on that day.

Sensex may test 14,000 level this week. But subdued trend in Asian bourses and a surge in crude price to above $63 a barrel may cap upmove on the domestic bourses today.

The market sentiment remains bullish due to strong FII-inflow, continued strong economic data and an upward revision in earnings growth of corporates by brokerages, on the back of strong Q2 results.

The latest data showed FIIs resumed buying after two-day outflow. FIIs bought shares worth a net Rs 258.10 crore on Thursday 30 November, compared to an outflow of Rs 63 crore on Wednesday 29 November. FIIs had pulled out a net Rs 335.30 crore on 28 November. Cumulative FII inflow for 2006 has reached $8.8 billion compared to record inflow of $10.7 billion in 2005.

Asian markets were mostly subdued on Monday (4 December). Key benchmark indices in Hong Kong, Japan, South Korea, and Singapore were down by between 0.1% to 0.3%.

US stocks fell on Friday after a manufacturing index showed its weakest reading in more than three years and a Federal Reserve official said more rate hikes may be required to control inflation. The Dow Jones industrial average fell 27.80 points, or 0.23 percent, to 12,194.13, while the Standard & Poor's 500 Index dropped 3.92 points, or 0.28 percent, to 1,396.71. The Nasdaq Composite Index sank 18.56 points, or 0.76 percent, to 2,413.21.

Nymex crude was hovering at $63.47 after Friday (1 December)’s surge.