The market is expected to keep trading in a range, coupled with high volatility on account of mixed cues ahead of the expiry of December 2006 derivative contracts. December 2006 derivative contracts expire next Thursday (28 December).
Volumes are likely to be low, as foreign fund managers will be on year-end holiday. Instead, operators and mutual funds will dictate activity on the bourses till the year-end, say dealers.
The near term trigger for domestic bourses is Q3 December 2006 results. Market men expect December 2006 quarter to be another strong quarter in terms of earnings growth. The Q3 results will start trickling in from about 12 January 2007. Strong advance tax payments support this view.
Cement companies and oil firms have paid substantially higher advance tax in the third installment of 15 December 2006. State Bank of India, Tata Steel, Reliance Industries (RIL), Hindalco, L&T, and Cipla have paid substantially higher advance tax in the third installment. Q3 results will start trickling in from about 12 January 2007.
Technical analysts feel that the Nifty has a strong support, at 3,700, and the Sensex at 12,800-12,900.
Bajaj Hindustan and Plethico Pharmaceuticals will announce annual results in the forthcoming week.