Market may consolidate at higher level

The market is expected to consolidate at higher levels, before making any fresh upmove. It will see spells of volatile movements as it consolidates.

Derivatives contracts for November 2007 series expired on Thursday, 29 November 2007. Nifty futures saw a healthy rollover of 76% to December 2007 series from November 2007 series. The overall rollover in the futures & options segment was about 72% to 75%.

The BSE Sensex rose 510.32 points or 2.70% to settle at 19,363.19 while the S&P CNX Nifty rose 154.15 points or 2.74% to 5762.75, in the week ended Friday, 30 November 2007.

At current 19,363.19, Sensex trades at a PE multiple of 18.44 to 19.36 based on projected FY 2009 EPS of Rs 1000-to-Rs 1050 for 30 Sensex companies.

Any sharp outflow of funds by foreign institutional investors (FII) may dampen the sentiment. Their selling may continue in the near term as they may resort to year-end profit taking. FIIs follow calendar year as their accounting year.

FII outflow in the spot market in November 2007, till 28 November 2007, reached Rs 4872.30 crore. FIIs had made heavy purchases in September 2007 and October 2007. FIIs had bought shares worth a net Rs 16132.60 crore in September 2007 and Rs 20590.90 crore in October 2007.

The European Central Bank and Bank of England meet on 6 December 2007 to consider interest rates decisions.

Back home, India's gross domestic product (GDP) rose 8.9% in the second quarter ended 30 September 2007, which was below a robust 9.3% growth recorded in the first quarter ended June 2007. The data was released on Friday, 30 November 2007.