The market began the New Year with a bang as Sensex jumped 155 points to 13,942 on Tuesday 2 January 2007, on the back of strong auto sales for December 2006. Nifty rose 41 points to settle at 4,007.40.
According to technical analysts, Nifty has resistance at 4030. If the Nifty crosses this mark then it is likely to sustain the 4000 levels, they reckon. For the Sensex, a strong resistance lies at 14,035.
The next major trigger for the market is Q3 December 2006 results. While strong Q3 results are already factored in share prices, market players will be closely watching what the company managements have to say about outlook for Q4 March 2007 and FY 2008 (year ending 31 March 2008). Infosys kickstarts Q3 earnings season on 11 January.
FIIs turned buyers on the last trading day of calendar 2006. FIIs were net buyers to the tune of Rs 331.90 crore on Friday 29 December, as compared to their huge outflow of Rs 1049.70 crore on Thursday 28 December. But as per provisional data, FIIs were net sellers to the tune of Rs 201 crore on Tuesday 2 January, the day when Sensex had risen 155 points.
Mutual funds, meanwhile, are on a buying spree on the bourses. Mutual funds bought shares worth a net Rs 1627 crore in December 2006. Mutual funds, it appears, are putting excess cash to use. Mutual funds’ cash level in November 2006 was at Rs.9000 crores. Of this, Rs 7,500 crore lied with existing mutual funds. The NFOs (new fund offers) cash level was at Rs 1,700 crore. Recently, Reliance Mutual Fund raised about Rs 2100 crore from an equity scheme targeted for investment in small-cap and mid-cap shares.
Asian markets were mostly in the green on Wednesday (3 January 2007). Key benchmark indices in Hong Kong, Singapore and Taiwan were up by between 0.6% to 1.1%. US markets were closed on Tuesday (2 January).